One of the first things you need to know as an entrepreneur is which VAT rate to charge. There are different rates, and which applies depends on what you supply. Using the wrong rate can cause problems. This article lists the rates.
What is the general rate?
The general VAT rate is 21%. This applies to most goods and services. If you supply a product or service for which no reduced rate or exemption applies, you charge 21% VAT. For many freelancers, such as in business services, this is the standard rate.
When does the reduced rate apply?
For certain goods and services a reduced rate of 9% applies. Think of food, books, medicines and some services such as hairdressers and bicycle repairers. The list is specifically set, so check whether your service falls under it before applying this rate.
When is something exempt?
Some services are exempt from VAT, such as certain services in healthcare, education and the financial sector. If you're exempt, you charge no VAT, but you also can't reclaim the VAT on your costs. It's important to know whether your work is exempt.
How do you know which rate applies?
The correct rate depends on the precise nature of your product or service. If in doubt, check the rules or ask your bookkeeper. Charging the wrong rate can lead to additional assessments or too high a price for your client. When in doubt it's better to figure it out properly in advance.
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
Looking for a bookkeeper?
Schedule a no-obligation call and find out what Fiscly can do for your business.
