Danish declaration on reduced VAT rates at the ECOFIN Council meeting March 10, 2009

Bulgaria, Estonia, Germany, and Lithuania agreed on the following declaration on the scope of reduced VAT rates at the ECODIN Council meeting on March 10, 2009.

Declaration by Bulgaria, Denmark, Estonia, Germany and Lithuania on the agreement on reduced VAT rates.

Bulgaria, Denmark, Estonia, Germany and Lithuania do not wish to make use of the extended scope of reduced VAT rates, call on other Member States to show similar restraint in the application of reduced rates in order to avoid contagious effects and notes that more reduced VAT rates.

• will narrow the tax base and burden public finances;
• may only help earnings and possibly, employment in the sectors eligible for reduced VAT rates, at the expense of other sectors, leaving total employment unaffected;
• will increase administrative burdens for businesses and governments,

Bulgaria, Denmark, Estonia, Germany and Lithuania underline that any future decision on reduced VAT rates should reduce the overall scope for reduced VAT rates.