Brussels, 16/11/2004 (Agence Europe) - At France's request, Tuesday's Ecofin Council discussed the question of reduced rates of taxation on Value Added Tax (VT). This reactivation of the debate aims to overcome the impasse in negotiations on the legislative proposal made by the Commission in this field. Council President Gerrit Zalm acknowledged that "the debate is complex. There are many differences due to the diametrically opposed interests at stake". The Commission's proposal of July 2003 extends the scope of reduced rates and examines the different derogations that some Member States can take advantage of. Within the Council, France hopes to include the restaurant and catering sector, whereas many delegations remain firmly against any change. Joaquin Almunia, Commissioner for Economic and Financial Affairs, pointed out that the Commission will soon be drafting a document informing Member States of the delays concerning regimes underway. Discussions will resume in three weeks during the next Council.
The Commission presented its proposal for simplifying the VAT declaration formalities (see EUROPE of 5 November, p.15). It above all proposes introducing an optional and electronic one-stop shop system. Such a system would allow companies with crossborder activities to fulfil their VAT obligations in their country of establishment only.
EUROPE will come back to the Ecofin Council conclusions on financial services.