Subject:
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Re: Lego prices?
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Newsgroups:
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lugnet.general
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Date:
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Thu, 15 Jan 2004 10:24:57 GMT
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Viewed:
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841 times
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>
> > The VAT is a tax on sales, and the money drawn in can be used for anything
> > by the government.
>
> Not quite so...
> The bulk of VAT goes to Brussels. A portion is used to finance the EU's organs,
> and another is distributed in the form of subsidies, grants and convergency
> funds - all of which have strict allocation rules (mainly, for structural public
> works). The small portion of VAT that a country may or not charge above EU's
> requirements is added to the "cake", but has comparably low impact over
> healthcare financing.
I have to disagree here. They can be used for anything.
It might be true for Portugal that the bulk of VAT is used to finance the
Portugeese contribution to EU, but that is the choice of Portugal, it is not the
case in Denmark.
What is common about the VAT in EU is that the legal framework for each
memberstate's own legislation is the same. All current memberstates have (or
should have had) implemented the so called 6th. directive. This lays down the
(quite detailed) principles of how VAT is collected nationally, how to treat
international commerce within the EU and between EU and other countries etc.
If you ever have a dispute about a VAT-issue with your national tax-authority
you can ultimately bring your case to the EU supreme court. They will then
decide if the Portugeese legislation is against the 6th. directive.
>
> > OTOH, EU has regulated VAT for its member countries, it can't vary too much
> > between countries, and you may not have too many different VAT levels (I
> > think we have one for food, one for building materials, and one for
> > everything else).
>
> Yup, same here.
> But our healthcare comes from an autonomous fund, levvied from incomes. The
> state's budget pays for hospitals and wages, everything else comes from that
> fund (at least nominally).
It is true that the politicians are working towards having the same VAT levels
in all memberstates, but it is definately not something that is just around the
corner. One of the reasons is exactly that the memberstate's state budgets are
funded very differently. In Denmark the VAT actually yields more income for the
state budget than income taxes does. And the funds collected from both VAT,
income taxes and corporate taxes are spended on all sorts of things and the
contribution to the EU budget is just one of those things. EU has no direct
authority to decide how much each member state should collect in taxes and spend
on welfare etc. However, those countries that has the Euro as their currency has
agreed to some principles of not having a budget deficit of more than a certain
percentage in order to make the Euro a stable currency and fight inflation.
I think we will se a harmonization of corporate tax levels within the EU before
we will se a harmonization of the VAT levels. Most politicians seems to have
realized that it is not a good thing that the memberstates compete to attract
foreign investments by keep lowering corporate taxes. The VAT is not subject to
this because it is ultimately paid by private consumers and they don't tend to
move to another country quite as often as company headquarters do.
Martin
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Message has 1 Reply:
 | | Re: Lego prices?
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| (...) Then I stand corrected, regarding Denmark and possibly other memberstates too. Thanks to Arne as well for his input. Out of curiosity: where is the danish contribution for the EU drawn from? Of course I now have to ask exactly why we're paying (...) (20 years ago, 15-Jan-04, to lugnet.general)
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Message is in Reply To:
| | Re: Lego prices?
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| (...) It was known as "EEC" from 1957 until 1992, then "EC" until 1995 - so technically, you're correct: the "EU" isn't that old. :-) Is it possible that this is a mere coincidence? Before we joined the EEC we had a similar sales tax (with a (...) (20 years ago, 14-Jan-04, to lugnet.general)
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