EU may scrap low VAT rates for dirty products

The European Commission has proposed to limit the use of reduced VAT rates in the EU, including a complete ban for products and services that are harmful to the environment, health and welfare and distort the internal market.

These are some of the principles that the commission says should guide a reform of the VAT system outlined in a policy paper released on Tuesday. The commission does not seem to be particularly keen on reduced rates for environmentally-friendly products, which member states such as France and the UK have been advocating.

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