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European Parliament approves extension, expansion of reduced VAT rates

The European Parliament approved with a large majority a proposal by EU Tax and Customs Commissioner László Kovács to extend reduced VAT rates for some labor-intensive services and expand their scope.

The decision is likely to send a strong message to EU finance and economy ministers, who must work out the details of extending the reduced rates by March. The reduced rates, which would be expanded to include such activities as home construction and catering services, expire at the end of 2010.

Before the vote on the extension, Kovács said the proposal was in line with the EU program for strengthening the European economy, as it would preserve workplaces, support SMEs and help the building industry. (MTI – Econews)