TOP 6 – Highest VAT rates in the world

Updated on June 2, 2022

Bhutan has the highest VAT rate in the world.

The VAT rate in Bhutan is the highest in the world.

The Kingdom of Bhutan (50 percent )

The country of Djibouti (33 percent )

It is Burma/Myanmar (30 percent )

The Republic of Hungary (27 percent )

The United States of America (25 percent )

The Nordic countries of Norway and Sweden (25 percent )

With a VAT rate of 50 percent, Bhutan is the undisputed VAT champion of the world, with no other country even close. Bangladesh, which has a VAT rate of only 15%, is located immediately north of this country. Despite its size, Djibouti comes in second with a 33% share of the vote. East Africa’s problematic corner near Eritrea and Ethiopia is where you’ll find this city. Known as Burma before it was renamed Myanmar, the country has a lower VAT rate of 30 percent. Because all goods, services, and products in Denmark are subject to a flat 25 percent sales tax, the country is ranked fifth in the world in terms of VAT rates.

TOP 5 – Countries with the highest VAT rate in Europe

Across Europe, we are seeing a move from corporation tax to consumption tax, just like in the rest of the world. Because taxing consumers is simpler and more reliable than taxing businesses, governments are shifting the tax burden from the latter to the former. The race to entice foreign investment is fierce, and every country believes that its corporate tax rates must be lowered, a reality that fuels this tendency. The following is a list of the European countries with the highest rates of value added tax:

The Republic of Hungary (27 percent )
The United States of America (25 percent )
The Nordic countries of Norway and Sweden (25 percent )
Croatia, Finland, and Greece (24 percent )
Portugal, Poland, and Ireland (23 percent )

TOP 5 – European Union VAT level “leaders”

The EU member states with the highest VAT rates at the time of this writing:

The Republic of Hungary (27 percent )
The United States of America (25 percent )
The Republic of Sweden (25 percent )
Croatia, Finland, and Greece (24 percent )
Portugal, Poland, and Ireland (23 percent )
Hungary’s climb to the top of the VAT rankings can be attributed to two factors. To begin with, the Hungarian government decided to boost the VAT rate in order to restore the country’s financial stability. The second is that Hungary has reduced its corporation tax rate to barely 9 percent, partially funded by maintaining the EU’s highest VAT rate. In order to compete unfairly with other EU countries when it comes to business investment, the high VAT rate is being utilised to finance an extremely low corporate tax rate. The EU is pressuring the country to cut this rate.

Data source: Swedish article about the highest VAT rates in the world

The remaining EU countries and their VAT levels can be found here

/Fredrik Åkerström