EU VAT rates directive: the last measures of Directive 2022/542 apply from 1 January 2025

What changed in detail

Council Directive (EU) 2022/542 of 5 April 2022 amends the VAT Directive (2006/112/EC) and Directive (EU) 2020/285 on VAT rates. It was published in OJ L 107 and entered into force on 6 April 2022, the day of publication (Article 5). The new rate framework in Article 98 has been available to Member States since then:

• up to two reduced rates of at least 5%, applied to supplies in up to 24 points of Annex III;
• in addition, a rate below 5% or a zero rate (exemption with deduction) in up to seven points;
• reduced rates or exemptions on fossil fuels, peat and firewood end by 1 January 2030, and on chemical pesticides and fertilisers by 1 January 2032.

Article 3(1) sets 1 January 2025 for a closed list of measures only:

• points (1) and (2): admission to virtually attended events, and related services streamed or made virtually available to non-taxable persons, are taxed where the customer is (Articles 53 and 54);
• point (5): the rate on imports follows the rate on like domestic supplies (Article 94);
• points (7) and (20): no reduced rate for works of art, collectors’ items and antiques sold under the margin scheme (new Article 98a, amended Article 316);
• point (12): Article 103 is deleted;
• Article 2: the amended turnover rule for the SME scheme.

From the same date Member States may also apply reduced rates to live-streamed access under Annex III points (7) and (13), and to point (26).

What it means

The 1 January 2025 date is not when the reduced-rate freedoms started; Member States could use those from April 2022. What switched on in 2025 is narrower: the place-of-supply rule for virtual events, the import-rate rule and the art-dealer restriction. The SME change travels with the cross-border scheme in Directive (EU) 2020/285. All of these remain in force; the 2030 and 2032 phase-out dates for fossil fuels and agricultural chemicals are still ahead.