Germany slates EU VAT plan

Peer Steinbrueck, German finance minister, gave a clear indication Germany
was unlikely to back a plan proposed by EC earlier this week which will allow EU
member states to reduce VAT on certain goods and services.

The EC plan proposes to amend the EU VAT directive to enable member states
reduce VAT on labour-intensive services and locally supplied services
permanently, such as restaurants and hairdressers,

However, speaking to the proposal this week, Steinbrueck complained member
states had not been adequately consulted and suggested the commission had not
thought the idea through thoroughly enough.

He warned that, cutting rates of VAT to as low as 5% on these services, as
proposed by EC, would reduce his government’s tax revenues by more than €3.5bn,
‘That’s not something that you could ever describe as peanuts,’ he said.

Further reading:

the story

Related reading