Wednesday, July 19, 2006

Genuine release from the European Commission

VAT: Commission asks the Czech Republic, Hungary, Malta, Poland and Portugal for information on the application of reduced rates to children's diapers

The European Commission has decided to send requests for information in the form of letters of formal notice to several Member States about their application of reduced VAT rates to children's diapers. The Commission believes that reduced rates on these goods do not comply with the Sixth VAT Directive (77/388/EEC), which was revised for the last time in February 2006. However, the Commission fully supports social and family friendly policies, as part of the EU’s response to the pressing challenge of demographic ageing. For these reasons the Commission will in parallel take the necessary steps in order to create a legal basis for the application of reduced VAT rates to children's diapers.

The European Commission's tax section really is getting desperate in its desire to harmonise taxes. This is almost as pathetic as the time they took action against Portugal for operating a lower rate of VAT on a Lisbon toll bridge, entirely in Portugal, on the grounds that it was preventing the workings of the Single Market.


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