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krystian
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 Poland Drops Veto of EU Deal on Tax Rates
Poland Agrees to Drop Its Veto of EU Deal That Would Lower Sales Tax Rates
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Poland agreed Wednesday to drop its veto of an EU deal that would lower sales tax rates, bending to pressure from fellow EU members to extend reduced rates for services such as hairdressing and home repairs.
Poland's earlier refusal to accept the hard-won compromise had caused "concern and irritation," Austria said on behalf of EU governments. Its decision to relent means reduced value-added tax rates for some labor-intensive services will remain in place until the end of 2010 across the 25-nation bloc.
The compromise came in a last-ditch meeting in Vienna between Polish Finance Minister Zyta Gilowska, EU Taxation Commissioner Laszlo Kovacs, Austrian Chancellor Wolfgang Schuessel and Austrian Finance Minister Karl-Heinz Grasser.
The deal to extend the reduced rates for services, such as hairdressing and home repairs, needed the unanimous support of all EU countries. A Polish "no" would have meant that eight countries with the lower VAT rates would have faced legal action unless they ramped up rates to the EU minimum standard of 15 percent in the coming months.
"We have solved this in a good spirit," Schuessel told reporters after the meeting.
Gilowska said she was "very glad we have reached an agreement," and Kovacs said it came after "very effective cooperation" between the parties.
"At the end of the day, we have reached a goal that's carried by 25 countries," Grasser added. "With this result, we have shown that Europe can pull together in hard times ... It's a success for Europe."
The Poles had insisted that they wanted to keep a lower VAT tax rate for new home construction beyond 2008. Poland could do that by designating housing as "social policy," EU spokeswoman Maria Assimakopoulou said in Brussels.
The EU stressed that no country would be damaged by the deal, which extends reduced VAT rates for some labor-intensive services until the end of 2010. Austria's EU presidency had urged the Poles to drop their resistance, arguing that the deal was "in the interests of European solidarity."
The EU small business lobby UEAPME said a failure to strike a deal would have meant instant tax hikes of up to 14 percent, raising prices for services and threatening up to 200,000 jobs across Europe.
The VAT waivers expired at the end of 2005, and the European Commission was legally obliged to take countries with the lower tax to court.
The compromise, agreed on last week after years of debate, allows other countries to introduce the VAT waivers before the end of March.
The lower rates were introduced as a short-term measure in 1999 to encourage workers who often avoid tax, such as house cleaners and health care workers, to leave the so-called "black" economy.
AP Business Writer Aoife White in Brussels, Belgium, contributed to this story.
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 Posté le: Jeu Fév 02, 2006 10:18 am
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