Berlin and Paris close to VAT deal

Germany has signalled willingness to compromise in a conflict with France over reduced rates for VAT, with French president Jacques Chirac still pressing for lower taxes on restaurant meals.

The disagreement relates to an EU-wide scheme where member states can apply VAT rates as low as 5 percent instead of their national standard rates, on a list of "labour intensive" services.

The VAT holiday scheme ran out on 1 January this year, with EU leaders in December failing to reach ag...

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