What VAT Rate Should I Charge?

The rate is the easy part once you know which country has taxing rights. The country tells you the rate. The hard part is knowing which country, and that comes from the place-of-supply rules, not the rate table. This guide gives you the four-step method, the special categories that override the standard rate, and where to look up the actual numbers.

The four-step method

1. Decide which country has taxing rights. For most cross-border services this is the customer's country (destination-based). For physical goods it is the delivery country.
2. Decide if the customer is a business or a consumer. B2B with a valid VAT number generally means reverse charge: you charge zero. B2C means you charge the local rate.
3. Look up that country's rate for what you are selling. Most countries have one standard rate plus a small number of reduced rates for specific categories.
4. Apply the rate in force on the tax point date. If the rate changed mid-year, the date the supply happened (or the invoice date, depending on the country) decides which rate applies.

Standard, reduced, zero, and exempt: what each means

Standard rate

The default rate for most goods and services. In the EU, the minimum permitted standard rate is 15%; in practice rates range from 17% (Luxembourg) to 27% (Hungary). Outside the EU, ranges go from 5% (UAE, Saudi Arabia originally, before the increase to 15%) to 27% (Hungary remains the top).

Reduced rate

Lower rates for specific categories: food, books, public transport, hotel accommodation, pharmaceuticals, e-books in many EU states. Several countries have multiple reduced tiers (super-reduced, reduced, parking rate). The categories vary widely by country, which is why a "global VAT rate" lookup that ignores the product category is unreliable.

Zero rate

The rate is 0% but the supply is still a taxable supply, which means you can recover input VAT on costs related to it. Common zero-rated categories: exports, intra-Community supplies of goods (B2B EU), international transport, basic foodstuffs in some countries, books in the UK and Ireland.

Exempt

No VAT is charged and you cannot recover input VAT on related costs. Common exemptions: financial services, insurance, healthcare, education, residential rent. Exempt is not the same as zero-rated: exempt means out of the VAT system; zero-rated means in the system at 0%.

Out of scope

The supply is not within the country's VAT system at all (because the place of supply is elsewhere, or the supplier is not a taxable person). No VAT charged, but the rationale is different from exempt.

The standard SaaS pattern (digital services)

Almost every country with VAT or GST treats SaaS, downloadable software, and other digital services the same way:

• Standard rate applies to B2C cross-border sales once you cross the registration threshold in the customer's country.
• Reverse charge applies to B2B cross-border sales. You charge zero; the customer self-assesses.

There are almost no reduced rates for SaaS. A handful of countries reduce e-books or audiobooks; nobody reduces SaaS subscriptions. This is one of the few areas where a non-tax-savvy person can apply the rule reliably: if you are selling SaaS B2C in a country, charge that country's standard rate.

Cross-border services: the rate is the destination country's rate

For digital services, professional services, and most other cross-border B2C services, the rate is the customer's country's rate. Examples:

• UK SaaS company sells to a French consumer: 20% (France standard rate).
• US SaaS company sells to a German consumer: 19% (Germany standard rate).
• EU SaaS company sells to a Polish consumer: 23% (Poland standard rate).
• EU SaaS company sells to a Hungarian consumer: 27% (Hungary, the highest in the EU).

For B2B cross-border services, the rate is zero (reverse charge applies). The customer accounts for VAT in their country at their country's rate.

Cross-border goods: more nuanced

• EU intra-Community B2C goods: Below the €10,000 EU-wide threshold, charge home-country rate. Above it, charge the destination country's rate (and use the OSS to file a single return).
• EU imports B2C goods under €150: Use IOSS, charge the destination country's rate at point of sale.
• EU imports B2C goods over €150: The customer pays import VAT at the destination country's rate; you charge zero.
• UK imports B2C goods under £135: Charge UK VAT 20% at point of sale (after registering).
• UK imports B2C goods over £135: Customer pays import VAT.
• Exports outside the home VAT zone: Generally zero-rated, with documentary evidence of export.

Find any country's standard and reduced rates

The full table for 153 jurisdictions is in our worldwide VAT/GST/sales tax rates 2026 chart. It includes:

• Standard rate for each country
• All reduced rates with the categories they apply to
• Zero-rated categories
• The local currency the VAT amount must be stated in
• A downloadable CSV for engineering integration

What if the rate changed mid-year?

Apply the rate in force on the tax point date. The tax point is the date the supply takes place, which is typically:

• Goods: The date of delivery (or the invoice date if earlier).
• Services: The date the service is completed (or the invoice date if earlier).
• Continuous supplies (subscriptions): The earlier of the invoice date and the payment date for each billing period.
• Prepaid services: The date of payment.

If you invoice in January at the new rate but the service was delivered in December under the old rate, the old rate applies. The invoice date is a fallback, not the controlling date.

Recent and upcoming rate changes that affect SaaS sellers are tracked in our 2025-2026 rate change guide.

Edge cases you will hit

Bundled supplies

If you sell a SaaS subscription that includes consulting hours, and consulting attracts a different rate, the bundle is treated as a single supply at the rate of the principal element. The principal element is whatever the customer is "really" buying. If the consulting is the dominant value, the bundle is consulting-rated. If SaaS is dominant, SaaS-rated. Document the rationale.

Mixed B2B and B2C platforms

If your platform serves both, classify each customer at the time of sale based on whether they have provided a valid VAT number. A customer who provides one mid-cycle changes treatment from that point forward, not retroactively.

Discounts and promotions

VAT applies to the actual consideration received, not the list price. A 50% off promotion attracts VAT on the discounted price. Free trials are tricky: if the trial is genuinely free, no VAT applies; if there is any consideration (a token payment, a barter), VAT applies on the value of consideration. See our free trials post.

Refunds and credit notes

The credit note must reverse VAT at the same rate the original invoice charged. If the rate has changed since, you do not re-rate the original; you reverse at the original rate.

Practical workflow for a small finance team

1. Maintain a country-rate map keyed on the customer's country and (where relevant) product category. The CSV from our rate chart is a starting dataset.
2. Classify each customer as B2B or B2C at signup using a validated VAT number lookup. Use our free tax ID validator.
3. For B2C, apply the destination country's rate; for B2B, apply reverse charge.
4. Track threshold crossings monthly with the VAT Exposure Dashboard so you know when to register in a new country.
5. Track rate changes monthly. Use the rate chart's CSV update feed.

Quick lookup for the countries SaaS sellers hit first

Standard rates current 1 January 2026 for cross-border B2C digital services from a non-resident seller:

• EU (via OSS): destination rate, ranging from 17% (Luxembourg) to 27% (Hungary)
• United Kingdom: 20%
• Switzerland: 8.1%
• Norway: 25%
• Australia: 10% GST
• New Zealand: 15% GST
• Canada: 5% GST plus provincial tax (combined 5% to 15%, depending on province)
• Japan: 10% consumption tax
• Singapore: 9% GST
• South Korea: 10%
• India: 18% GST (OIDAR)
• Indonesia: 11%
• Thailand: 7%
• Malaysia: 8% service tax
• UAE: 5%
• Saudi Arabia: 15%
• South Africa: 15%
• Mexico: 16%
• Turkey: 20%

For the full 153-jurisdiction table including reduced rates and effective dates, open the rate chart.