Portugal among the EU countries with highest VAT

Portugal remains among the EU countries with the highest levels of VAT, applying a regular tax of 23%.

And according to the European Commission, revenues from Value Added Tax represent 18.1% of Portugal’s tax revenues.

The country is part of the group comprising Ireland, Poland, and Slovakia, ranking just behind Hungary (27%), Finland (25.5%), and Denmark, Croatia, and Sweden, which apply a rate of 25%.

Although the weight of this tax in European tax revenues declined slightly in 2024, VAT continues to represent one of the main sources of funding for Member States, according to the European Commission’s (EC) 2026 Annual Tax Report.

Brussels notes that, in 2024, VAT revenues accounted for 18.1% of the European Union’s total tax revenue, down 0.2 percentage points from 2023.

Even so, the tax accounted for 7.1% of European Gross Domestic Product (GDP), remaining above the historical trend and recording the fourth-highest percentage since the statistical series began in 1995.

The European Commission explains that, much like corporate tax, VAT revenue peaked in 2022—driven by inflation—and saw only minor adjustments over the following two years. Furthermore, the gradual phasing out of temporary rate reductions on essential goods and services—measures adopted by various governments to mitigate the inflation crisis—helped keep revenue collection at high levels.

The report shows that although VAT revenues remain robust, the overall weight of consumption taxes has been declining.

In 2024, consumption taxation accounted for 26.8% of the European Union’s total tax revenue, down from the 28.3% recorded in 2014. This decline occurred across all Member States, with the exception of Hungary, Greece, and France.

Source: EC/ECO