Brussels, 29/11/2007 (Agence Europe) - Discussions at the Council on the simplification and rationalisation of the European jungle of reduced rates of value-added tax (VAT) are likely to be littered with pitfalls in 2008, if the preparatory work for the adoption of the specific conclusions at the Ecofin Council, to be held on Tuesday 4 December, is anything to go by. Trapped between the positions of Germany, Austria and Denmark - joined to a lesser extent by Estonia and Lithuania - which are in favour of minimum usage of derogations to the common VAT system, the positions of the member states wanting to keep their reduced rates and those of delegations calling for equal treatment, the Portuguese presidency is obliged to scale down its ambitions. The latest draft conclusions on the table go no further than to call on the Council experts to “prepare a discussion” for June 2008, during which the finance ministers will analyse “the economic impact of the application of the reduced rates” and look into the question of “whether the reduced rates of VAT constitute an appropriate instrument to achieve the objectives” of job creation specific to the activities in question. On the basis of this discussion, the Ecofin Council may call on the Commission to: - “carry out an exhaustive analysis of the need for and efficiency of applying reduced VAT rates to certain goods and services, particularly for environmental reasons”; - “envisage the presentation, in 2008, of the proposal on reduced rates of VAT to be applied to a small list of services provided locally”, such as “highly labour-intensive services” and “catering services”, in order to resolve the most urgent cases. (M.B.)