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EU: Temporary VAT exemption for vaccines and testing kits (COVID-19)

EU: Temporary VAT exemption for vaccines, testing kits

The European Commission today issued a release concerning value added tax (VAT) relief measures allowing EU Member States to provide a VAT exemption for EU hospitals, medical practitioners, and individuals when acquiring coronavirus (COVID-19) vaccines and testing kits.


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As noted in an EC release, the new rules were adopted unanimously by all EU Member States.

The measures will allow EU countries to put in place a temporary VAT exemption for vaccines and testing kits being sold to hospitals, doctors, and individuals. Currently, EU Member States can apply reduced VAT rates on sales of vaccines but cannot apply a zero rate, while testing kits cannot benefit from reduced rates. Under the amended Directive, EU Member States will be able to apply either reduced or zero rates to both vaccines and testing kits. 

The new rules will apply from the day after their publication in the Official Journal of the European Union and will remain in place until the end of 2022, or until an agreement is reached on the EC's pending proposal for new rules on VAT rates, whichever is earlier.    

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