Comments on: Welcome to the EU, suckers

By: Gerhard

Gerhard — Thu, 20 May 2004 16:52:14 +0000

In Lithuania the prices level grown up.
Supermarkets increased prices immeadiatelly and now government try to do something.

By: Erik

Erik — Sun, 25 Jan 2004 04:41:55 +0000

One other reason for the Czech-Hungo disconnect: restaurant food is already taxed at 15%, and drinks at 25%, which I believe is the highest standard rate in Europe — so high I think even the EU says should come down a few points, to increase compliance. So maybe the Magyars just thought that they would wait and sort out both problems at once. Either way, it also helps to explain why eating out seems cheaper in PRG than BPT.

By: Erik

Erik — Fri, 23 Jan 2004 20:19:31 +0000

As for why the Hungarians would have asked for/demanded a grace period, I would only observe that my favorite little cafe near Parliament is owned by a leading politician. That, and, restaurants are already so friggin’ expensive here, not even leading politicians eat out much anymore.

By: john b

john b — Fri, 23 Jan 2004 17:17:18 +0000

Scott - I’m not exactly an EU expert, but I know it’s very hard for countries to set new differential tax rates (ie existing differentials can continue, but the EU frowns on existing members proposing new VAT differentials and on new members proposing any).

The Czech Republic, presumably because it wants to cut its budget deficit, has gone for a standard VAT rate of 22%. Because of the rules on differentials, it needs to apply this rate to more or less all non-zero-rated goods and services.

By: Scott MacMillan

Scott MacMillan — Fri, 23 Jan 2004 16:10:08 +0000

I wish I knew. Any EU tax law experts out there? Seems to me if the Spanish have 16% VAT on restaurants, the Czechs should be able to as well.

By: Antoni Jaume

Antoni Jaume — Fri, 23 Jan 2004 01:34:55 +0000

I find a VAT of 22% rather high. In Spain we have a 16% normal VAT. First need articles are at 7%. Why did the Czechs have so hight a rate?

DSW

By: Scott MacMillan

Scott MacMillan — Thu, 22 Jan 2004 21:51:29 +0000

The tax is one restauranting, not food itself. Here’s an article about the French proposal from December:
http://www.euobserver.com/index.phtml?aid=13842

Moreover, according to the Interfax translation of a Lidove Noviny report, I was mistaken in writing that Hungary and Poland had failed to negotiate a transition period. Apparently they did — for themselves. The Czechs, thinking the French proposal to allow 5% VAT on restaurants would pass, didn’t even try. Duh!
http://www.interfax.com/com?item=Czec&pg=0&id=5682302&req=

These are those little EU tidbits that you’d think would be easy to dig up, but never are. If anybody finds out more details, I’d love to see them.

By: Doug

Doug — Thu, 22 Jan 2004 18:59:12 +0000

My cynical take on this ten years ago was that EU enlargement would be finished when at least one of the new members would walk in as a net contributor. Hello Slovenia!

By: john b

john b — Thu, 22 Jan 2004 18:32:31 +0000

Ah, but in the Czech Republic domestic beer is actually nice.

(OK, so the UK does have some good domestic bitters and ales. However, most people drink either imported lagers, brewed-under-licenses, or the top-selling “lager” brand, which I think is made by putting dishwater in a Soda Stream).

Is the Czech tax on food, or on restauranting? If the former, this seems particularly unfair: food is still zero-rated in the UK, over 25 years after VAT’s introduction…

By: Matthew

Matthew — Thu, 22 Jan 2004 17:46:19 +0000

The price of imported wine falls and all you can say is ‘Whoop-dee-doo’? That the price of imported alcohol might fall is the main reason a substantial proportion of the British population remains supportive of joining the euro! Or maybe that’s just me…