The December edition of our International VAT Rate Round Up features the latest updates from Costa Rica, Ghana, Latvia and the Netherlands.
Costa Rica
In October 2025, Costa Rica introduced Bill No. 25.239 — Reform for a Fair VAT and a Modern Cadastre. The proposal sets out a gradual reduction of the standard VAT rate from 13% to 10%, over a three-year implementation plan:
- Year 1: The reduced 10% VAT rate would apply to essential goods and services, including the basic basket of goods, medications and school transportation.
- Year 2: Focus shifts to achieving minimum operational coverage of the National Unique Cadastre, a key step for accurate taxation
- Year 3: The 10% VAT rate would expand to all goods and services under the general regime, even if full cadastre coverage is not yet complete, ensuring households still benefit from the tax relief.
The reform aims to shift the tax burden away from everyday household consumption and toward accumulated wealth. It also seeks to modernise fiscal instruments, reduce tax evasion, close territorial gaps, and strengthen public finances through a more diversified and resilient tax system.
On November 5, the bill was referred to the Legislative Commission for further review.
Ghana
The Government reaffirmed its commitment in the 2025 Mid-Year Fiscal Policy Review to reform Ghana’s VAT system – aiming to make it fairer, simpler, and more efficient.
A comprehensive VAT reform package has now been submitted to Parliament for approval. Among the proposals is a reduction of the effective VAT rate from 21.9% to 20%, marking a key step toward easing the tax burden on businesses and consumers.
Latvia
The Latvian government is considering reductions to VAT rates for several categories of goods, including books, press publications and basic food items.
Key proposals include:
- 5% VAT on books of all types—printed or electronic—including those supplied online or through digital download.
- 5% VAT on press and mass media publications, such as newspapers, magazines, bulletins, and other periodicals, in both printed and electronic form. The reduced rate would also apply to subscription fees.
- 12% VAT on essential food items, including:
- Fresh fruits and vegetables that have not been thermally or otherwise processed (e.g. no freezing, salting, or drying)
- All types of bread
- Fresh, sterilised, or pasteurised milk
- Fresh chilled poultry and eggs
Draft law No. 1124/Lp14 was published on 14 October and has already passed its first reading in Parliament. The second reading is scheduled for 5 December 2025. If adopted, the proposed VAT changes are expected to enter into force on 1 January 2026.
Netherlands
On 30 October 2025, the Dutch government published an official announcement confirming the planned VAT increase on accommodation, raising the rate from the current 9% to the standard 21%, effective January 2026.
The Dutch tax authority also updated its guidance on the VAT rate on accommodation, clarifying:
- What qualifies as accommodation
- Services considered part of accommodation (currently taxed at 9%)
- Services not considered part of accommodation (and therefore taxed at the 21% standard rate)
Despite the upcoming increase, the government confirmed that the 9% reduced VAT rate will continue to apply to:
- Artworks (including imports and sales by creators)
- Books and periodicals, including digital formats
- Library lending services
- Access to sports facilities and swimming pools
- Admission to museums, concerts, theatre, and sports events
- Performances by artists
- Digital access to news websites and publications
This adjustment aligns the VAT system with broader fiscal goals while maintaining relief for cultural, educational, and essential services.
International VAT Rate Round Up: November 2025
If you missed last month’s VAT rate announcements or VAT threshold changes, you can catch up now.
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