Finland
The Finnish Government is proposing a 0.5 percentage point reduction to its reduced VAT rate, lowering it from 14% to 13.5% starting in 2026.
The change would apply to a broad range of goods and services currently subject to the 14% rate, including:
- Food products
- Restaurant and catering services
- Feed materials
- Passenger transport
- Accommodation and guest harbour services
- Medicines
- Cultural and sports-related activities, such as
- Books
- Sports services
- Tickets to cultural and sports events
- In addition, the proposal may impact public broadcasting services, which are currently taxed at a reduced 10% rate.
The Ministry of Finance has launched a public consultation on the proposed changes.
The deadline for submitting comments is 15 August 2025.
Lithuania
After several amendments and previously rejected drafts, the Government of Lithuania has officially adopted Legal Act XV-287 on June 20, introducing significant changes to the country’s reduced VAT rate structure.
Effective 1 January 2026, a new reduced VAT rate of 12% will replace the current 9% rate. This change affects a specific list of goods and services, as outlined below.
The goods and services subject to the new 12% rate include:
- Accommodation services
- Passenger transport services and their luggage on regular routes
- Admission to all types of art and cultural establishments and events
- Printed and electronic books, as well as non-periodical publications
To ensure a smooth transition, the following exceptions apply:
- Thermal energy, hot/cold water supply
- The current 9% rate will remain applicable for supplies delivered until 31 December 2025
- Accommodation services
- The 9% rate will apply to reservations registered before 31 December 2025, regardless of the actual date of the stay
- Passenger transport and cultural event attendance
The 9% rate will apply to payments made before 31 December 2025, even if the service is provided in 2026.
Romania
Despite the new Romanian government initial announcement that there would be no increase to the standard VAT rate, fast steps were taken on implementing VAT rates changes.
For less than two weeks, the Draft Law PL-x nr. 230/2025 was presented, debated and referred to the President for promulgation.
The proposal contains serious changes in the VAT rates:
- An increase of the standard rate from 19% to 21%
- A combination of the two reduced rates of 5% and 9% into a single rate of 11%
The new reduced rate of 11% will apply to:
- Books, newspapers and magazines
- Admission to cultural and historical objects
- Delivery of firewood and thermal energy
- Food and medicines
- Fertilisers and pesticides
- Water supply and sewerage services
- Accommodation and restaurant/catering services
The new rates come into force from 1 August 2025.
As of 16 July 2025 the draft law is referred to President for promulgation, however the final adoption may depend on a decision on a possible unconstitutionality.
International VAT Rate Round Up: June 2025
If you missed last month’s VAT rate announcements or VAT threshold changes, you can catch up now.
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Authors
Lisa Dowling
Specialising in International VAT Compliance solutions, Lisa brings a wealth of knowledge and insight in her dealings with a host of international clients ranging from start-ups through to multinationals. With 21 years VAT experience behind her, Lisa has managed VAT compliance issues and solutions globally for for over 11 years. Fintua have 12,000 + corporate clients in over 109 countries and many of these are members of the Fortune 500.
