Poland Nixes Compromise on VAT Exemptions Poland Rejects European Union Compromise on Sales-Tax Exemptions
The Polish government rejected a European Union compromise on sales-tax exemptions, the finance minister said Monday, making Poland the only dissenting country in a deal that requires unanimous support.
"Poland maintains its negative position toward the project presented by the Austrian Presidency" of the EU, Zyta Gilowska said in a statement released Monday.
Poland is the only country blocking the agreement, which requires all 25 EU member states' approval, after the Czech Republic and Cyprus accepted a compromise on sales-tax exemptions Sunday.
The agreement would extend VAT exemptions until the end of 2010, which would allow them to levy lower taxes on services, such as hairdressing and home repairs.
But the Poles argue they want to keep a lower value-added tax rate of for new home construction beyond 2008. Gilowska said the decision was based on "the good of Polish citizens and the need to protect the interests of our country."
The issue is urgent because value-added tax waivers expired at the end of 2005 and the commission is legally obliged to sue the nine countries that currently use a lower rate. It said it would make a decision on legal action on Wednesday.
The EU presidency extended Poland's deadline for making a decision until Tuesday, out of respect for its three days of mourning for 67 people killed in the collapse of an exhibition hall in Katowice.