Presidency calls it a day in bid for VAT?deal

The Finnish presidency has abandoned hopes of securing agreement on reform of value-added tax (VAT) before the end of the year.

"It’s now clear for everybody that we can’t get political agree-ment on all elements of the VAT package," said a Finnish diplomat following talks yesterday.

"The political linkage between reverse charging and the VAT package by Germany is the main problem."

Reverse-charging is used to combat fraud. Germany claims that VAT fraud costs it €17-18 billion per year.

But other member states are not convinced by Germany’s argument and have resisted calls to introduce the system.

Finance ministers will continue discussions next week (28 November).

An extension of the European Investment Bank’s lending mandate to €25.8bn will be agreed on the same date.

The Finnish presidency has abandoned hopes of securing agreement on reform of value-added tax (VAT) before the end of the year.