Cyprus still fighting for a better deal in value-added tax rates
NICOSIA (Reuters) – Cyprus said yesterday it would be constructive in finding a compromise in an EU deadlock over prolonging reduced value-added tax (VAT) rates but that a deal should safeguard its national interests. Poland, the Czech Republic and, to a lesser extent, Cyprus were locked in a row with their European Union partners over amending VAT rates. Unanimity is required among all 25 members on tax decisions. The three countries argue that the Austrian presidency proposals extending low-tax regimes to a number of countries discriminate against newcomers, which have cutoff dates to abolish tax breaks and meet higher rates in line with EU requirements. Cyprus, which has low rates on a number of services, ranging from its money-spinning tourism industry to food takeaways and pharmaceuticals, said it would submit its views in writing to the EU. «We have kept a consistent stance on this issue since 2003,» a Finance Ministry official said. «We are going to submit our views and hope it can be settled through Ecofin processes. Our objective is to get the best possible result both in the interests of the EU and with the best interests in mind for Cyprus.» The row has exposed an east-west rift in the bloc, which admitted 10 mainly Central and East European members in 2004. The EU has a standard minimum VAT rate of 15 percent but has a long list of exceptions that expired in December.
