Irish-style zero-rate VAT included in latest EU proposals

IRELAND’S zero VAT rate was written into the latest proposal to allow EU countries to maintain reduced rates of value-added tax.

This is the first time the zero-rate has been recognised in this way and could mean the rate - which typically applies to children’s clothing and shoes - could be maintained in the longer term.

The move was welcomed by Finance Minister Brian Cowen, attending the monthly EU Finance Ministers meeting in Brussels. He said it meant that Ireland could help progress the negotiations for agreement on the issue.