The EU Commission has published a draft directive which would fix the minimum standard VAT rate at 15% for another five years.
The VAT Directive, as currently constituted, provides that the minimum standard rate will expire at the end of the year. As the Draft Directive rather pithily puts it “In the light of the current economic crisis, there are further arguments for keeping a minimum standard rate to be laid down in the VAT Directive.”
Implicit in a minimum standard rate is an understanding (not legislated for) that the maximum rate will not be more than ten percentage points above it. At present two EU Member States (Cyprus and Luxembourg) apply a 15% rate while three max out at 25% (Denmark, Hungary and Sweden).