The ENDS publication reports that the European Commission is set to reject calls from governments including France and the UK to reduce the amount of value added tax applied to greener products such as energy-efficient light bulbs and dishwashers.
Draft legislative proposals amending the 2006 VAT directive have been drawn up by the commission's tax department, and circulated to other departments for internal consultation.
Under the directive, member states are allowed to apply VAT rates below the block-wide minimum of 15 per cent for certain products agreed at EU level. It is then up to each individual state to decide whether and at what level to apply the reduced rate, down to a minimum of 5 per cent.
The draft proposal would only allow EU states to apply reduced VAT rates to a limited number of green products requiring specialist installation, such as solar panels and wind turbines.
It also recommends reduced rates for a number of green services, including energy audits and environmental certifications.
The finalised proposal is expected to be tabled in late March or early April once the internal consultation process is complete. Once tabled, the proposal would have to be endorsed by all 27 EU member states in order to become law.  27/02/09

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