Czechs help broker EU deal on reduced sales tax

The Czech EU presidency on Tuesday helped broker a long-sought deal on reduced sales tax on certain services in the EU, as Germany yielded to French pressure to allow less tax to be charged in restaurants. The issue of whether EU countries can apply reduced value added tax rates for specific labour-intensive industries has been one of the longest running unsettled dossiers in Brussels. In the latest effort to break the deadlock, the European Union's Czech presidency put a compromise proposal on the table for the finance ministers' meeting, which was then heavily revised before an agreement could be reached. In addition to including restaurants on the reduced VAT list, the deal dropped a 2010 deadline for the expiration of current exemptions on window-washing, hair-dressing, building renovations and bicycle and home repairs.