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EU Lawmakers Back Effort to Give Countries More VAT Flexibility

March 9, 2022, 6:24 PM

European Parliament lawmakers Wednesday backed a reform of the European Union value-added tax rules, which would give the bloc’s countries more scope to reduce rates while phasing out reduced rates on some environmentally-harmful activities.

Members of the parliament voted 612-14 with 71 abstentions to back an update to the EU VAT Directive (2006/112/EC) that would require elimination of reduced rates on fossil fuels and firewood by 2030, and on chemical pesticides and fertilizers by 2032.

  • Currently, countries must apply a rate of at least 15% but can apply two reduced rates of no lower than 5% on ...