1/1/2006: EU min. VAT of 16%

Z

z102

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There is an EU legislation demanding a minimum VAT of 16 % for all member states . This legislation is supposed to come into force (EU wide ) at the first of January 2006 . What is the Irish position, would that effect rebated products like energy, children clothing etc. ? Or: Is the taxpayer aware of this ?
Sorry that I can't help with further details such as EU legislation numbers .
 
I am not very familiar with the EU rules on the matter but that link supplied by Clubman suggests it is a minimum standard rate of VAT of 15% and has existed for some time. The standard rate in Ireland is 21% and is therefore higher than the minimum.

The rebated products like energy, children clothing etc you refer to are charged at various rates other than the standard and as long as they continue to be allowable as exceptions to the standard rate I don't see them being effected.
 
Thanks! I heard the theme was discussed in the EU parliament and the proposal of the EU Comission rejected by the EU parliament and a new common 16% VAT is what the parliament wants . But I could have got it all wrong, thanks again.
 
It may be the tax harmonisation supporters pushing their agenda again. I think the reason VAT has a minimum standard rate while other taxes do not is because trade would be unduly distorted if one state could charge 0% VAT on everything while others were charging 15-20+%.

However by having a minimum standard rate as opposed to a common standard rate states still have some element of control over their own rates subject to the minimum.

Changing from a minimum standard rate to a common standard rate for the EU is probably not going to fly as long as Ireland, UK and the few others continue to oppose (and veto) tax harmonisation.
 
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