Taxation and Customs Union

Coronavirus response: Commission welcomes agreement on crucial VAT relief for vaccines and testing kits

On 7 December, the European Commission welcomed the adoption of important new measures which will enable Member States to relieve EU hospitals, medical practitioners and individuals of Value-Added Tax (VAT) when acquiring coronavirus vaccines and testing kits.

The new rules, adopted unanimously by all Member States and based on a Commission proposal of 28 October (as part of the Communication on additional COVID-19 response measures), are designed to give better and cheaper access to the tools needed to prevent, detect and treat coronavirus.

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, as well as closely related services. Currently, 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, Member States will be able to apply either reduced or zero rates to both vaccines and testing kits if they so choose. 

The coronavirus pandemic has demanded an extraordinary response from authorities in all policy areas. The Commission is now intensifying work to prepare for the roll-out of new vaccines in the EU - in particular following recent ground-breaking announcements by global pharmaceutical players.

EU taxation and customs policy will continue to play an integral role in providing access to these crucial medical supplies, while also ensuring the safety of the goods that reach the internal market.

Next steps

To allow an immediate response from Member States, the rules will apply from the day after their publication in the Official Journal of the European Union. They will remain in place until the end of 2022, or until an agreement is reached on the Commission's pending proposal for new rules on VAT rates, if the latter occurs earlier.    

For More Information

DG TAXUD COVID Response

Proposal for a Council Directive amending Council Directive 2006/112/EC as regards temporary measures in relation to value added tax for COVID-19 vaccines and in vitro diagnostic medical devices in response to the COVID-19 pandemic

Communication on additional COVID-19 response measures and press release on coronavirus resurgence