Apart from establishing the minimum VAT standard rate at the level of 15%, (practically only Luxemburg, Cyprus and Malta apply the minimum rate), the Member States had been given the opportunity to apply one or two 'reduced rates', set at the level not lower than 5% and to be applied to certain specific categories of goods and services annexed to the Directive plus natural gas and electricity provided that it creates no distortions of competition.
Apart from establishing the minimum VAT standard rate at the level of 15%, (practically only Luxemburg, Cyprus and Malta apply the minimum rate), the Member States had been given the opportunity to apply one or two 'reduced rates', set at the level not lower than 5% and to be applied to certain specific categories of goods and services annexed to the Directive plus natural gas and electricity provided that it creates no distortions of competition.