Teknovis

The EU is now officially in recession, and both the EU and the member states’ governments are trying to develop strategies to ensure that the economic downturn is as short as possible.

One of the main driving forces behind any economy is consumer spending, and it is interesting to see how different governments are trying to encourage consumer spending. For example, the British government has decided to reduce VAT from 17.5% to 15% in the beginning of December. Meanwhile, the Irish government has decided to increase VAT from 21% to 21.5% in the beginning of December also! More details can be found in Darling cuts VAT in pre-Budget measures.

Since VAT is calculated at the point of sale for transactions within the EU, these changes will mean that the difference in cost between buying in Ireland and the UK will become 6.5% based on the VAT alone. This is bad news for Irish businesses (and ultimately the government), but it is great for both British businesses and consumers!

I already do a significant amount of my shopping online in other EU member states, and I will try and do even more this Christmas. I am particularly fond of shopping on Spanish websites where the VAT is 16%, and I also purchase online quite regularly on a Luxembourgian website where the VAT is 15%. Now the websites in the UK will be getting more of my business!

If you are curious about the rates of VAT in the different EU member states then take a look at European Union Value Added Tax.

Tags: Ireland, Spain, Tax, UK