Reduced VAT rate changes across the EU

Finland: Reduced rate lowered to 13.5%

Finland has proposed to lower its current 14% reduced VAT rate to 13.5% as from January 1, 2026.

This lower rate would apply to a broad range of goods and services, including:

• catering
• food
• medicines
• passenger transport
• accommodation

Lithuania: Adjustments to multiple reduced rates

Lithuania increases its reduced VAT rate from 9% to 12% as from January 1, 2026. This change would apply, for example, to:

• catering
• passenger transport
• accommodation

In addition, Lithuania intends to lower the VAT rate on medicines, books and publications from 9% to 5%.

Germany: Possible reintroduction of 7% reduced rate

Germany might reintroduce the 7% reduced VAT rate for food sold by hospitality businesses.
At this stage, the measure still awaits formal approval.

What does this mean for your organization?

Changes in reduced VAT rates can have a direct impact on your VAT setup, tax codes, system determination and compliance processes. If you operate in these markets or sell the affected goods and services, it is important to assess how these adjustments influence your reporting and master data.

Our VAT & Tax Technology specialists can help you review the impact on your VAT configuration and ensure a smooth transition when the new rates take effect. Need support? Fill in the form and we'll speak soon!