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EC finance ministers agree on VAT, excise taxes.

As required under European Community law, EC finance ministers unanimously agreed on a package of value-added tax (VAT) and excise rates, thus ending one of the most controversial phases of European single-market negotiations. In commenting on the agreement, EC tax commissioner Christiane Scrivener said, "We have won the battle for the abolition of fiscal frontiers."

A 15% minimum standard VAT, which is a tax added at each stage of a product's production, distribution and retail sale, became effective on January 1, 1993. However, member states have the option of choosing a reduced VAT rate, subject to a minimum of 5%, from a common list of eligible goods and services. Zero or super-reduced rates can be maintained until at least 1997, and special high VAT rates on certain high-priced goods, such as luxury cars and stereo equipment, have been eliminated.

Minimum excise duties were adopted on oil products, spirits and tobacco products.
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Title Annotation:value-added tax
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Mar 1, 1993
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