Press Release: VAT reduced rates: Commission launches a political debate on how to simplify current EU legislation

The European Commission, in its Communication adopted on 5 July 2007, considers that there is a real need for a simplification and rationalisation of the current VAT rates structure, in particular the reduced VAT rates. It believes that there is a place for more flexibility which would allow Member States to apply VAT reduced rates to local supplies. However, this flexibility needs to be balanced to ensure the proper functioning of the Internal Market and to avoid disproportionate compliance costs for business. To this extent, possible ways are put forward but no concrete proposal is made for new categories of products or services, given the need for prior political consideration by Member States. At the same time, the Commission proposes to extend, until the end 2010, most of the derogations coming to an end soon.

European Commission: DG Communication: MEMO/07/277 http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/277&format=HTML&aged=0&language=EN&guiLanguage=en

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