The May edition of our International VAT Rate Round Up highlights the latest updates from Ecuador, Finland, Lithuania and Switzerland.
Ecuador
On 12 March 2024, in the supplement to the Official Gazette 516, it was published that it was expected the VAT may increase by 1%, bringing the rate to 13%.
On 18 March 2024, in the supplement to the Official Gazette 520, the President of the Republic, Daniel Noboa AzÃn, modified the standard VAT rate from 13% to 15% for the year 2024 with effect from 1 April 2024.
Below is a synopsis of the VAT rate changes:
• 12% until 31 March 2024
• 15% for 1 April 2024 – 31 December 2024; and
• 13% from 1 January 2025
Finland
On 16 April 2024, the Finnish Government announced a future VAT rate increase as part of its General Fiscal Plan for 2025 – 2028.
The standard VAT rate will be increased from 24% to 25.5% to strengthen public finances.
Some reclassifications are also announced for the goods and services currently subject to the 10% reduced VAT rate, which moves them to 14%.
Lithuania
Members of parliament have proposed reinstating the 9% reduced VAT rate for catering services that are offered by:
• Cafes
• Restaurants
• Takeaway food
This will exclude alcoholic beverages.
This proposed change would be in force from 1 July 2024 to 31 December 2027.
If this change is accepted, this will come into effect from 1 July 2024.
Switzerland
The Swiss parliament are considering an increase in VAT rate.
From 2026, the VAT rate may increase to 8.5%.
The VAT rate is currently set at 8.1%.
The Federal Council has instructed the Federal Department of Home Affairs to submit a consultation draft with the agreed key parameters by summer 2024.
The dispatch for the attention of parliament is to follow by autumn 2024.
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