EU ministers divided over change to VAT directive
EU ministers are divided over an EU proposal to enable member states to lower the VAT on certain services
After a meeting between EU finance ministers in Nice on Saturday, German
finance minister Peer Steinbrueck said Germany was ‘downright sceptical’ about
the proposal to enable member states to lower
the VAT rate permanently on certain labour-intensive and locally supplied
services such as restaurants and hairdressers.
Austria and Denmark have also come out in opposition to the plan,
The proposal to amend the
VAT directive was introduced by taxation commissioner Laszlo Kovacs in July
in an effort to reduce VAT on these services.
The aim of the proposal is to make rates below the 15% EU standard, already
enjoyed by 18 member states for a limited period up to 2010, permanent and open
to all member states.