Press Release: VAT Rates Across the World

The value-added tax (VAT), also known in some countries as the goods and services tax, is a consumption tax that applies to almost all sold goods or services and it is payable to the revenue authorities in the country where the transaction takes place.

Countries typically impose a standard rate as well as a reduced rate for goods and services according to their type. The VAT rates across the world differ and while some countries like Singapore impose a low goods and services tax, others have a high standard rate for most types of goods and services.

Countries with low VAT rates

Singapore and Bahrain are examples of countries that impose a low tax on goods and services, at 7% for Singapore and 5% for Bahrain. In addition to this low tax, certain types of goods and services are zero-rated or completely exempt from the tax. For example, in Bahrain financial services are exempt from VAT while basic foodstuffs, healthcare, medicine, and medical equipment, among others, are zero-rated. In Singapore, exports and international services are also subject to a zero goods and services tax (GST) rate.

The table below lists some of the countries with the lowest VAT/GST rates in the world:

• Bahrain: 5%;
• Saudi Arabia: 5%;
• United Arab Emirates:5%;
• Canada: the Canadian Federal GST has a value of 5%;
• Singapore: 7%;
• Thailand: 7%;
• Liechtenstein: 7.7%;
• Sri Lanka: 8%;
• Fiji: 9%;
• Australia, Indonesia, Paraguay and Vietnam: 10%;
• Lebanon: 11%;
• Botswana and Ecuador: 12%;
• China: 13%;
• Egypt: 14%;
• New Zealand, South Africa: 15%.

Certain jurisdictions, such as the Cayman Islands, Gibraltar, or Hong Kong do not impose this tax.

Countries with high VAT rates

Countries with a value-added tax above 15% and more are listed below:

• Mexico, Venezuela and Zambia: 16%;
• Pakistan and Mozambique: 17%;
• Turkey: 18%;
• Romania, Chile and Colombia: 19%;
• Germany: a standard rate of 19% temporarily reduced to 16% in response to the COVID 19 pandemic;