Value added tax: EU countries want to allow a reduced rate on more products

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As if lubricated: Bicycles should also be available at reduced rates in the future

Photo: Westend61 / IMAGO

EU countries already use lower VAT rates than the standard rate for a number of products.

The finance ministers of the 27 countries have now revised the list of goods and services for which this is possible.

According to the agreement, the states should be able to apply the lower tax rate - in Germany seven instead of 19 percent - for a number of new services and environmentally friendly products.

This applies to corona protective masks, contraceptives or even bicycles.

European Parliament deliberates on the list

A lowering is also possible for medical or hygiene products or for certain eco-articles such as solar cells.

Services such as Internet access can also be taxed lower.

Some goods that cover basic needs should be able to be completely exempted from VAT in the future.

The new rules say nothing about the level of the rates in the individual states.

In the second half of 2020, for example, Germany lowered VAT across the board in order to stimulate the economy after the corona slump.

The agreement that has now been reached after almost four years of discussions is aimed at reforming the almost 30-year-old EU rules.

According to the EU Commission, the list of goods and services for which VAT can be reduced is primarily added to those "which serve to protect public health, are environmentally friendly and promote digital change".

In Germany there is currently a reduced VAT rate of seven percent for many "basic needs" products.

This includes foods such as bread and butter, but also books and newspapers.

There have recently been discussions in the EU about the so-called tampon tax.

In the past year, reduced rates for such hygiene articles were also introduced in Germany.

The new directive is now going to the European Parliament, which is due to comment on it by the end of March 2022.

A final decision by the EU states is then expected.

apr / AFP / dpa