McCreevy upbeat on zero rate VAT

IRELAND was confident of retaining its zero rate VAT on children’s shoes and clothes despite a plan to harmonise rates discussed by EU finance ministers in Italy at the weekend.

The European Commission is pushing to rationalise VAT rates, especially on the range of goods that enjoy special reduced VAT rates in different countries.

Taxation Commissioner Frits Bolkestein has warned that if agreement is not reached, the temporary arrangement allowing special reduced rates on goods will come to an end at the end of the year.