New EU Council Directive 2018/912 on minimum standard VAT rate

• The new Council Directive (EU) 2018/912 of 22 June 2018 amending Directive 2006/112/EC on the common system of VAT as regards the obligation to respect a minimum standard rate 15% has been published in OJEU  L 162/1 27.6.2018.

A 15% minimum standard rate has been maintained on a provisional basis since VAT rules for the EU single market were first applied in 1993.The introduction of a minimum permanent ordinary rate is linked to the plan to introduce a new Community trade regulation based on the principle of taxation at the place of destination, in the context of which, although the Member States can be given greater discretion in determining the rates, it is appropriate to maintain a minimum reference threshold for the ordinary VAT rate.The minimum standard rate prevents excessive divergence in VAT rates in the member states and eliminates the risk of distortions of competition through lower VAT rates that would have an impact on cross-border shopping and trade.