EU relaxes its rules on reduced rates of VAT

The European Union has finally enacted a long-awaited measure to grant member states more freedom to set reduced rates of VAT in their territory.

Currently, member states of the EU must set their standard rate of VAT at least 15 per cent but may also choose to apply one or two VAT rates below that level (known as reduced rates) to certain supplies. The EU restricts eligibility for those reduced rates to a specific list of goods and services set out in its VAT legislation.

Source RSM

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