1. OVERVIEW
Purpose of This Analysis
This page provides a comparative overview of VAT rates applied to hairdressing and beauty services across European countries. The data demonstrates the wide variation in VAT treatment across Europe and provides context for understanding how different tax policies affect the sector.
Note: For detailed analysis of employment trends and VAT impact, see the dedicated Ireland Analysis page, which examines Ireland's 14-year experience with varying VAT rates.
VAT Rate Range
Wide variation across Europe (Belgium lowest confirmed reduced rate; Hungary highest standard rate)
Threshold Range
Spain/Portugal require immediate registration; UK has highest at ~€108k
Reduced Rate Countries
Countries with reduced rates for hairdressing
2025 EU SME Scheme
New cross-border threshold for EU businesses
2. VAT RATES BY COUNTRY (2025)
Current VAT Rates for Hairdressing Services
| Country | Standard VAT | Hairdressing Rate | Notes |
|---|---|---|---|
| Austria | 20% | 20% | Standard rate applies |
| Belgium | 21% | 6% | Reduced rate for hairdressing |
| Bulgaria | 20% | 20% | Standard rate applies |
| Croatia | 25% | 25% | Standard rate applies |
| Cyprus | 19% | 19% | Standard rate applies |
| Czech Republic | 21% | 21% | Standard rate applies |
| Denmark | 25% | 25% | No reduced rates in Denmark |
| Estonia | 24%* | 24%* | *Increasing from 22% in July 2025 |
| Finland | 25.5% | 25.5% | Increased from 24% Sept 2024 |
| France | 20% | 20% | Standard rate applies. A reduced rate existed 2000-2003 under an EU pilot for labour-intensive services but was discontinued after evaluation showed it wasn't creating jobs as intended — not currently in force. |
| Germany | 19% | 19% | Standard rate applies |
| Greece | 24% | 24% | Standard rate applies |
| Hungary | 27% | 27% | Highest standard rate in EU |
| Ireland | 23% | 13.5% | Reducing to 9% from July 2026 |
| Italy | 22% | 22% | Standard rate applies |
| Latvia | 21% | 21% | Standard rate applies |
| Lithuania | 21% | 21% | Standard rate applies |
| Luxembourg | 17% | 8% | Reduced rate for hairdressing (standard rate rose to 17% in Jan 2024) |
| Malta | 18% | 18% | Standard rate applies |
| Netherlands | 21% | 9% | Reduced rate for hairdressing |
| Poland | 23% | 8% | Reduced rate for hairdressing |
| Portugal | 23% | 23%* | *Unable to confirm hairdressing on Portugal's reduced-rate lists (Lista I: 6%, Lista II: 13%). Portugal's default rule is that anything not on those lists takes the standard rate — shown here provisionally as standard pending direct confirmation from a Portuguese tax authority source. |
| Romania | 21%* | 21%* | *Standard rate rose from 19% to 21% Aug 2025. Hairdressing is standard-rated — the new 11% reduced band (which replaced the old 5%/9% bands) applies to other categories, not hairdressing. |
| Slovakia | 23% | 23% | Increased from 20% Jan 2025 |
| Slovenia | 22% | 9.5% | Reduced rate for hairdressing |
| Spain | 21% | 21% | Standard rate (beauty treated as luxury) |
| Sweden | 25% | 25% | Standard rate applies |
| United Kingdom | 20% | 20% | Standard rate applies |
Non-EU European Countries
| Country | Standard VAT | Hairdressing Rate | Notes |
|---|---|---|---|
| Norway | 25% | 25% | Standard rate applies |
| Switzerland | 8.1% | 8.1% | Lowest standard rate in Europe |
3. KEY OBSERVATIONS
VAT Rate Distribution
| VAT Rate Category | Number of Countries | Examples |
|---|---|---|
| Reduced Rate (5-10%) | ~10 countries | Belgium (6%), France (5.5%), Ireland (13.5%), Netherlands (9%), Portugal (6%) |
| Standard Rate (15-27%) | ~20 countries | UK (20%), Germany (19%), Spain (21%), Denmark (25%), Hungary (27%) |
Countries with Reduced Rates for Hairdressing
Approximately 10 EU member states apply reduced VAT rates to hairdressing services:
- Belgium: 6% (vs 21% standard)
- Netherlands: 9% (vs 21% standard)
- Ireland: 13.5% (vs 23% standard) - reducing to 9% from July 2026
- Luxembourg: 8% (vs 17% standard)
- Poland: 8% (vs 23% standard)
- Slovenia: 9.5% (vs 22% standard)
Corrected 24 August 2026: France, Romania, and Portugal were previously listed here as reduced-rate countries for hairdressing. Direct verification found France and Romania apply the standard rate (France's reduced rate was discontinued over 20 years ago); Portugal could not be confirmed as reduced-rate and is shown as standard pending further checking. All three have been removed from this list.
Recent VAT Rate Changes (2020-2025)
COVID-19 Temporary Measures:
- Germany: Temporarily reduced standard rate from 19% to 16% (July-Dec 2020)
- Ireland: Cut hairdressing rate from 13.5% to 9% (Nov 2020 - Sept 2023)
- Various countries: Temporary reductions for hospitality sectors
2024-2025 Changes:
- Finland: Increased standard rate from 24% to 25.5% (Sept 2024)
- Estonia: Increasing from 22% to 24% (July 2025)
- Slovakia: Increased from 20% to 23% (Jan 2025)
- Romania: Increasing rates across categories (Aug 2025)
- Ireland: Announced reduction to 9% effective July 2026
Comparative Context
What This Data Shows:
- Wide variation: VAT rates for hairdressing range from 5.5% (France) to 27% (Hungary)
- No consensus: Countries take different approaches - some view hairdressing as essential (reduced rate), others as luxury (standard rate)
- EU flexibility: EU VAT Directive allows member states to apply reduced rates to certain services, including hairdressing
- Recent trend: Mix of increases and decreases, with some countries raising overall VAT rates while others maintain or reduce hairdressing-specific rates
- UK position: At 20%, UK is in the middle range compared to European countries
Self-Employment Rates (Available Data)
Where available, hairdressing sector self-employment data shows:
| Country | Self-Employment Rate | VAT Rate | VAT Threshold | Source/Notes |
|---|---|---|---|---|
| UK | 53% (2022-23) | 20% | £90,000 (~€108,000) | HMRC FOI data |
| USA | 58% | No VAT | N/A | Various US states have sales tax |
| Italy | 55% | 22% | €85,000 | Eurostat Labour Force Survey |
| Netherlands | 55% | 9% | €20,000 | Eurostat Labour Force Survey |
| Spain | 52% | 21% | None (immediate registration) | Eurostat Labour Force Survey |
| Germany | 59% | 19% | €22,000 | Eurostat Labour Force Survey |
| France | 62% | 5.5% | €37,500 (services) / €85,000 (goods) | Eurostat Labour Force Survey |
| Poland | 66% | 8% | 200,000 PLN (~€43,000) | Eurostat Labour Force Survey |
Key Observations:
Self-employment vs VAT rates: Self-employment rates vary from 52% to 66% across countries with vastly different VAT rates. France has both the lowest VAT rate (5.5%) and high self-employment (62%), while Poland has low VAT (8%) and the highest self-employment (66%). This suggests VAT rate is not the primary driver of self-employment trends in the sector.
VAT thresholds matter more: The VAT registration threshold is arguably more important than the rate itself. Spain requires immediate VAT registration (no threshold), while the UK has the highest threshold at £90,000 (~€108,000). Low thresholds force more businesses into VAT compliance, potentially pushing smaller operators into the informal economy. High thresholds (like UK and France) allow more legitimate small businesses to operate below the VAT system, reducing compliance burdens on micro-enterprises.
Threshold vs informal economy: Countries with no threshold (Spain) or very low thresholds may inadvertently encourage cash-only trading to avoid VAT registration, while countries with higher thresholds enable legitimate small-scale operators to remain formal without VAT burdens.
VAT Registration Thresholds by Country (2025)
VAT registration thresholds determine when businesses must register and start charging VAT. These thresholds are crucial for understanding sector dynamics, as they influence:
- The size of the formal vs informal economy
- Compliance burdens on small businesses
- Incentives for staying below threshold (to avoid VAT admin)
- The number of VAT-registered businesses in the sector
| Country | VAT Threshold (Domestic) | Hairdressing VAT Rate | Standard VAT Rate |
|---|---|---|---|
| UK | £90,000 (~€108,000) | 20% | 20% |
| Ireland | €85,000 (goods) / €42,500 (services) | 13.5% (reducing to 9% July 2026) | 23% |
| France | €85,000 (goods) / €37,500 (services) | 5.5% | 20% |
| Germany | €22,000 | 19% | 19% |
| Italy | €85,000 | 22% | 22% |
| Spain | None (immediate registration required) | 21% | 21% |
| Netherlands | €20,000 | 9% | 21% |
| Belgium | €25,000 | 6% | 21% |
| Poland | 200,000 PLN (~€43,000) | 8% | 23% |
| Portugal | None (immediate registration required) | 6% | 23% |
| Austria | €35,000 | 20% | 20% |
| Sweden | 120,000 SEK (~€10,500) | 25% | 25% |
| Denmark | 50,000 DKK (~€6,700) | 25% | 25% |
| Finland | €20,000 | 25.5% | 25.5% |
| Czech Republic | 2,536,500 CZK (~€100,000) | 21% | 21% |
| Romania | 300,000 RON (~€60,000) | 11% | 21% |
| Hungary | 12 million HUF (~€30,000) | 27% | 27% |
| Slovakia | €62,500 | 23% | 23% |
| Slovenia | €60,000 | 9.5% | 22% |
| Estonia | €40,000 | 24% (from July 2025) | 24% (from July 2025) |
| Latvia | €50,000 | 21% | 21% |
| Lithuania | €55,000 | 21% | 21% |
| Luxembourg | €50,000 | 9% | 16% |
| Malta | €35,000 (goods) / €30,000 (services) | 18% | 18% |
| Cyprus | €15,600 | 19% | 19% |
| Croatia | €50,000 | 25% | 25% |
| Bulgaria | 50,000 BGN (~€25,000) | 20% | 20% |
Understanding VAT Thresholds:
- Highest thresholds: UK (~€108,000), Czech Republic (~€100,000), and France/Ireland/Italy (€85,000 for goods) offer the most protection for small businesses
- No threshold: Spain and Portugal require immediate VAT registration regardless of turnover, creating higher compliance burden on micro-businesses
- Low thresholds: Cyprus (€15,600), Sweden (~€10,500), and Denmark (~€6,700) force even very small businesses into VAT system
- New EU SME scheme (2025): Cross-border threshold of €100,000 allows EU businesses to sell across borders without immediate VAT registration in each country
- Impact on sector: Higher thresholds correlate with larger numbers of legitimate small operators, while low/no thresholds may push micro-businesses toward cash-only informal economy
Note: Currency conversions are approximate and based on October 2025 exchange rates. Some countries have different thresholds for goods vs services.
4. METHODOLOGY & DATA SOURCES
VAT Rate Sources
Primary Sources:
- European Commission - VAT rates overview: Official EU VAT rates database
- Individual country tax authority websites and publications
- OECD tax database
- EY, PWC, Deloitte international tax guides
Recent Changes:
- Government budget announcements (2024-2025)
- Official tax authority press releases
- VAT specialist publications (VAT Solutions, EuroFiscalis)
VAT Threshold Sources
Primary Sources:
- Council Directive (EU) 2020/285 - EU VAT Directive on small enterprises
- European Commission VAT threshold data
- Individual member state tax authority publications
- VAT compliance platforms (Fonoa, VATcalc, Azola Legal)
2025 Changes:
- New EU SME Scheme: €85,000 domestic threshold maximum, €100,000 cross-border threshold
- Multiple countries increased thresholds due to inflation (2024-2025)
- Ireland: Updated thresholds €85,000 goods / €42,500 services (from €80,000/€37,500)
Self-Employment Data
Sources:
- Eurostat Labour Force Survey
- OECD Statistics database
- National statistical agencies
- Industry reports and surveys
Note on Data Availability:
Self-employment data by occupation is not uniformly available across all European countries. Where available, it typically comes from labour force surveys conducted by national statistical agencies and compiled by Eurostat/OECD.
Data Quality Notes
Limitations:
- VAT rates can change during the year - this represents 2025 rates as of October 2025
- Some countries have regional variations (e.g., Canary Islands in Spain)
- Classification of "hairdressing services" may vary slightly between countries
- Self-employment data may use different occupational classifications
- Some temporary measures may have expired or been extended since publication
Updates:
VAT rates are subject to change. Always consult official national tax authority sources for current rates when making business decisions.
Related Analysis
For detailed analysis of how VAT rate changes affect employment:
- Ireland Analysis: Comprehensive 18-year study of employment trends across multiple VAT rate periods
- UK Employment Analysis: PAYE and self-employment trends 2018-2023
Report Information
Compiled by: SalonLogic Pro / Andrew Clelland
Date: October 2025
Contact: andrew@salonlogic.co.uk
Disclaimer
This information is provided for general reference only and does not constitute tax advice. VAT rates and classifications change frequently. Always consult official sources and seek professional advice for specific situations.