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krystian
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 EU strikes VAT deal with Poland
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The European Union persuaded Poland to sign up to a long-sought deal on reduced value added tax, the bloc's presidency said.
"We have resolved the problem," Austrian Chancellor Wolfgang Schuessel, whose country holds the rotating six-month EU presidency, told journalists after meeting Polish Finance Minister Zyta Gilowska and European Tax Commissioner Laszlo Kovacs.
"It's a victory for Europe," enthused Austrian Finance Minister Karl-Heinz Grasser, who had played a key role in convincing Poland.
Poland had rejected a compromise deal agreed by the other 24 EU member states on which labour-intensive services should benefit from VAT breaks.
Warsaw wanted the construction of new houses to be included on the list, which currently covers services such as home renovation, haircutting, home-care and minor repairs for items such as bicycles and shoes.
The deal will extend existing arrangements which expired at the end of last year, until the end of 2010.
Poland's stubborn refusal to sign the agreement had left the EU presidency aghast and a spokesman in Vienna declared it "unacceptable to Europe".
Like all issues regarding tax harmonisation in the EU, the list of exceptions from normal minimum VAT rates must be unanimously accepted by all member states.
Under the existing arrangement, nine member states have opted since 1999 to apply a lower rate of VAT with the aim of boosting employment in sectors dominated by small businesses.
Exceptions aside, EU rules do not allow a minimum VAT rate of less than 15.0 percent.
Kovacs said "Poland would not have gained anything" by sticking to its refusal, adding that "the best case scenario has applied: Poland had shown its solidarity with the 24 other members."
Gilowska confirmed she had signed the accord, which will be presented to the next meeting of the EU's council of finance ministers.
Sighs of relief resonated at the news in France, where the lower VAT rate is particularly cherished in the building trade and is credited with creating thousands of jobs.
French Prime Minister Dominique de Villepin congratulated Schuessel for ensuring Poland changed its mind.
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 Posté le: Jeu Fév 02, 2006 10:17 am
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