Decision on zero VAT rate on fruit and vegetables to the next cabinet

• The decision to apply a zero VAT rate on deliveries of fruit and vegetables and/or alternative health measures is up to the next cabinet, according to State Secretary Van Rij of Finance.
• A workable and legally tenable definition for fruit and vegetables is necessary for implementation.
• The standing committee for Finance proposes to adopt the definition used in several European countries with VAT differentiation.
• The inclusion of organic products under the zero VAT rate may face obstacles due to the principle of neutrality, which requires the same VAT rate for competing products from the average consumer’s perspective.
• This could result in unintentional zero rates for non-organic products.

Source Taxlive

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