EU proposes Europe-wide VAT

The European Commission has published proposals for direct taxes across the European Union (EU), including a possible Europe-wide version of VAT. The proposals are part of a package of options being explored to find new ways of funding the EU budget. The UK, France and Germany have all rejected the idea of direct taxes in the EU. Currently all 27 member states pay a fixed amount to the EU budget, based on their GDP and a percentage of their VAT. The proposal was first mooted by the EU’s budget commissioner Janusz Lewandowski in August.