The European Union Sets the broad VAT rules using the European VAT Directive. As part of the directive they have set the minimum standard VAT rate at 15% but the 27 member states are however free to set their standard VAT rates above this. The EU has also permitted a maximum of two reduced rates which must be 5% or above. Some countries have variations on this, including a third, Zero VAT rate.
Member states have now agreed that they will be free to set the reduced rates on most goods and services, including e-books; domestic fuel; clothing; and female hygiene products.
Each EU member state have also set their own distance selling thresholds allowing the free movement of goods between member states without the need for VAT registration in the country, However the date you exceed the threshold within a calendar year or begin to store goods in a member state you MUST register for VAT in that country.
