EUOBSERVER / BRUSSELS - The European Commission has opted to allow reduced sales tax for housing, local restaurants and some small services in a move welcomed by France but poised to spark opposition in other countries, mainly Germany. The proposal, unveiled by EU tax commissioner Laszlo Kovacs on Monday (7 July), enables the bloc's member states to apply lower VAT rates for some specific sectors on a permanent basis. France has lobbied hard to get permission for reduced sales tax on restaurants Up until now, national capitals could use a scheme of temporary exemptions from regular VAT rates on a number of so called "labour intensive" services, such as bike and shoe repairs, house renovations or hairdressers. The experimental scheme was originally applied by 11 countries and after strong discussions among national finance ministers, it was prolonged in 2006 until the end of this decade. While goods and services are generally subject to a minimum 15 percent VAT in the EU, member states may apply reduced rates of not less than 5 percent to some sectors, as set out in a restricted list.
EUOBSERVER / BRUSSELS - The European Commission has opted to allow reduced sales tax for housing, local restaurants and some small services in a move welcomed by France but poised to spark opposition in other countries, mainly Germany.
The proposal, unveiled by EU tax commissioner Laszlo Kovacs on Monday (7 July), enables the bloc's member states to apply lower VAT rates for some specific sectors on a permanent basis.
France has lobbied hard to get permission for reduced sales tax on restaurants
Up until now, national capitals could use a scheme of temporary exemptions from regular VAT rates on a number of so called "labour intensive" services, such as bike and shoe repairs, house renovations or hairdressers.
The experimental scheme was originally applied by 11 countries and after strong discussions among national finance ministers, it was prolonged in 2006 until the end of this decade.
While goods and services are generally subject to a minimum 15 percent VAT in the EU, member states may apply reduced rates of not less than 5 percent to some sectors, as set out in a restricted list.
