John Ellis
Ceist:25 Mr. Ellis asked the Minister for Finance the current status of the EU Commission's proposals on the abolition of zero VAT rates and duty free shopping. [16737/96]
Written Answers. - Zero VAT Rates.
The European Commission has not come forward with any proposals to abolish zero rates.
The position is that the Commission has recently produced a paper entitled "A common system of VAT", (Com (96) 328 of 22 July 1996), which outlines the Commission's views on the current system and suggests a number of alterations. The main recommendations contained within the paper concern a single place of registration for traders for all taxable transactions in the EU, the determination of revenues due to each member state by statistical calculation of the taxed consumption on its territory and the approximation of rates to a considerably greater degree than at present. The standard rate, it is suggested, could be set within a narrow band and a small number of reduced rates would be allowed, but their number and scope would be limited. The Commission also recommends a uniform application of EU VAT law across the Union and modernisation of the system to take account of economic, judicial and technological developments.
The Commission has the right of initiative under the EU Treaties, but proposals related to taxation must obtain the unanimous approval of the Council. In this context, the Government will consider any proposals made by the European Commission in relation to a common VAT system on their merits and with due regard to the national interest.
As rgards duty free shopping, the provisions of EU Directives 91/680/EEC and 92/12/EEC authorise the continuation until 30 June 1999 of duty free shopping facilities for travellers within the EU. This measure was agreed so as to allow the operators involved sufficient time to diversify their activities. There have been no proposals in respect of duty free shopping from the Commission to date. Given the absence of such proposals, the facilities in question will cease on the date mentioned. Duty free facilities for travellers to and from the EU are not affected by the directives referred to.