New VAT at 2010

The European Commission is calling for simplification and rationalisation of value added tax (VAT) within the EU.

Tax commissioner Laszlo Kovacs  said a new framework for reduced rates is
needed.The simple rules are complicated by a multitude of derogations granted
to member states.

The commission's report, based on an economic study carried
out by a think-tank concludes that, from an economic standpoint, a single
uniform VAT rate for each country is 'the best policy choice'.

However, it noted that there may be specific economic
benefits from operating a reduced rate in carefully targeted sectors, and there
is scope for 'greater flexibility' to be given to member states when deciding
to apply a lower rate.

Whilst the basic rule is that VAT of at least 15 pct is
applied to all goods and services in the EU, member states may apply a reduced
rate of at least 5 pct to certain goods and services.