May 21: The Ministry of Finance issued a statement to clarify that a new “reduced” value added tax (VAT) rate of 10% for certain types of goods, was a draft and not yet approved.
The Ministry of Finance stated that, in accordance with the coalition agreement, the reduced VAT rate (10%) is not to apply to medical supplies and printed media, but only to pharmaceuticals, books, and essential baby nutrition. The new rate could be effective as early as 2015.
In addition, the Ministry confirmed that it has no plans to change the existing “reduced” VAT rate (15%) or the basic VAT rate (21%). In particular, food, water and sewerage services, heat and other items are to be subject to the same VAT rates as today.