VAT rate changes coming in 2026: What you need to know

As governments continue to balance digital transformation and fiscal reform, VAT rate changes remain a key lever. For global businesses, these changes are more than headline numbers, they directly impact pricing strategies, margin protection, invoicing accuracy and compliance obligations.

Looking ahead to 2026, several countries have already approved or proposed VAT rate changes across accommodation, food, culture services, healthcare and publishing. Others are still in consultation, signalling further complexity for finance and tax teams managing multi-country VAT exposure.

In this blog, we break down the confirmed and proposed global VAT rate changes coming in 2026, highlighting the sectors affected, and explain what businesses should be doing now to prepare.

Why VAT rate changes matter

VAT rate changes rarely happen in isolation. They often coincide with:

• Updates to invoicing and reporting requirements
• Adjustments to reduced or zero-rate requirements
• Increased scrutiny from tax authorities
• Short transition windows between announcement and enforcement

For organisations operating across borders, manual updates to ERP systems, tax engines and invoicing workflows introduce risk. Applying the wrong VAT rate, even temporarily, can result in penalties, audit exposure and customer disputes.

With 2026 shaping up to be another year of VAT reform, early visibility and automation will be key.

Confirmed and proposed VAT rate changes in 2026

Below is a country-by-country overview of VAT rate changes announced so far, based on current proposals, consultations and approvals.

Finland

Status: Included in the draft budget 2026

Effective date: 1 January 2026

Finland is consulting on a reduced VAT rate of 13.5%, down from 14%, covering a broad range of goods and services, including:

• Food and feed materials
• Restaurant and catering services
• Passenger transport
• Accommodation and guest harbour operations
• Medicines
• Cultural and sports activities (including books, sports services and event tickets)
• Public broadcasting (currently taxed at 10%)

This change would simplify rates across multiple sectors but will require careful system updates due to its wide scope.

What to watch:

• Outcome of the consultation
• Confirmation of affected categories
• Alignment with EU VAT directives

Germany

Status: Proposal

Effective date: 1 January 2026

 Germany has proposed a VAT cut from 19% to 7% for:

•  Restaurant services
• Catering services

This follows temporary pandemic-era measures and reflects ongoing support for the hospitality sector.

 What to watch:

• Distinction between on-site consumption, takeaway and delivery
• Impact on mixed-supply invoices
• Interaction with existing reduced-rate rules

Ireland

Status: Approved

Effective date: 1 July 2026

Ireland has confirmed a VAT rate reduction from 13.5% to 9% for:

•  Food
• Catering services
• Hairdressing services

 This mid-year change will require careful handling, particularly for businesses issuing long-term contracts or advance invoices.

What to watch:

• Transitional rules for invoices spanning July 2026
• Impact on consumer pricing and promotions
• Updates to point-of-sale systems

Kazakhstan

Status: Approved

Effective date: 1 January 2026

 Kazakhstan has approved a significant VAT reform, including:

•  Standard VAT rate increase from 12% to 16%
• Introduction of a 5% reduced VAT rate for:
  • Medicines
  • Medical products and components (including technical aids)
  • Medical services

This represents a major shift for healthcare providers, importers and pharmaceutical companies operating in the region.

What to watch:

•  Classification of qualifying medical supplies
• Impact on pricing and reimbursement models
• Compliance readiness for the higher standard rate

Lithuania

Status: Approved

Effective date: 1 January 2026

 Lithuania will introduce a new reduced VAT rate of 12%, replacing the current 9% rate for:

•  Accommodation services
• Passenger transport and luggage on regular routes
• Admission to art and cultural institutions and events
• Printed and electronic books
• Non-periodical publications

What to watch:

• System updates to reflect the rate increase
• Margin impact for tourism and cultural organisations
• Correct application across physical and digital publications

Netherlands

Status: Approved

Effective date: 1 January 2026

The Netherlands has confirmed that accommodation services will increase from:

•  9% to 21% VAT

 This change will directly affect hotels, short-term rentals and online booking platforms.

What to watch:

• Contractual pricing for bookings made in advance
• Platform liability for VAT collection
• Communication with customers around price changes

Vietnam

Status: Approved

Effective period: Extended until end of 2026

Vietnam has approved a further extension of the reduced 8% VAT rate, originally introduced in 2022, and now confirmed through the end of 2026.

What to watch:

• Sector-specific eligibility
• Continued government reviews
• Planning for eventual reversion to standard rates

What businesses should do now

While some changes are still subject to final approval, the direction of travel is clear. Businesses operating in affected countries should already be taking action.

Key steps to prepare for 2026 VAT changes:

• Map impacted supplies by country, sector and VAT rate
• Review contracts, pricing models and invoicing timelines
• Update tax determination logic and ERP configurations
• Monitor legislative developments and effective dates
• Ensure VAT recovery processes reflect new rates

Relying on manual updates or spreadsheets significantly increases the risk of error, particularly when multiple rate changes take effect on the same date.

Staying ahead of VAT change with Fintua

VAT rates will continue to evolve, and 2026 is no exception. For global organisations, the challenge isn’t just knowing what’s changing, it’s operationalising those changes accurately, on time, and at scale.

Fintua helps businesses:

• Track global VAT rate changes
• Automate VAT determination and recovery
• Reduce compliance risk across jurisdictions
• Stay audit-ready in an increasingly complex VAT landscape

As more countries announce VAT reforms in the lead-up to 2026, having the right technology and expertise in place will be critical.

Work with indirect tax experts

At Fintua, we help businesses navigate regulatory changes with clarity and confidence. From VAT compliance to multi-jurisdictional tax processes, our experts and technology keep you ahead of change.

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