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BRUSSELS, March 10 (Xinhua) -- After lengthy discussions, finance ministers from the 27-nation European Union forged an agreement to allow governments to lower value-added tax (VAT) on labor-intensive services.
The ministers agreed at their monthly meeting that services, including restaurant services, homecare, footwear repairment, could be subject to reduced VAT rates.
The agreement gave more flexibility to governments of member states, EU Tax Commissioner Laszlo Kovacs told a press conference after the meeting.
The agreement came after Germany, Sweden and Malta softened opposition, ending months of brows over the issue.
Germany has long been unconvinced by the proposal to streamline and make permanent a system of reduced rates that expires in 2010.
"We see no advantage in reduced VAT tax rates," German Finance Minister Peer Steinbrueck said here on Tuesday before meeting his EU colleagues.
"But nevertheless we try to be helpful, but only to a very limited extent," he said, adding that his government won't reduce VAT rates in Germany.
France preferred rates below the standard 15 percent on restaurant meals to fulfill an election pledge by President Nicolas Sarkozy, who has pushed for the tax to be cut in France to 5.5 percent from 19.6 percent.
Goods and services sold in the EU are normally levied a rate of at least 15 percent, but member states can apply reduced rates in certain cases.
The discussion was extremely difficult as major EU members were divided. Taxation matters require unanimity by all 27 members of the EU.
Editor: Xiong Tong |
