BROADCASTING: REDUCED VAT ON RECEPTION OF BROADCASTING SERVICES.

A draft Directive harmonising reduced VAT rates in the EU would do away with the reduced rate the Member States can currently apply to the reception of broadcasting (radio and TV) services. The proposal has not yet been approved by the European Commission. Initially set for debate at the weekly meeting on July 9, it was postponed owing to disagreement between Commissioners. The text has nonetheless caused an outcry in the French broadcasting industry. ARP (Auteur-Realisateurs-Producteurs), an association of authors, directors and producers, says the proposal would lead to the abolition of the reduced rate for subscriber television services and would "considerably alter the rules of the economic and financial game for a whole sector of activity". ARP calls for the review of VAT rates to factor in the specific nature of cultural goods and to allow all cultural goods to be taxed at the reduced rate.

The Commission's objective is to update Annex H of a 1977 VAT Directive (Directive 77/388/EEC, the Sixth VAT Directive of May17, 1977, harmonising Member States' laws on turnover tax), which lists all the...