Austria still pressing for EU agreement on taxes

The European Union's tax rules were said to be in chaos on Tuesday as Poland held out against a VAT compromise backed by all other countries, potentially triggering EU action against member states that still impose lower rates. Karl-Heinz Grasser, finance minister of Austria which holds the rotating EU presidency, said the 25-member bloc was in a "very serious situation", but a solution was still possible. The other 24 EU countries back a proposal by Vienna to extend by five years an arrangement which expired last year and allowed VAT on selected services in nine member states to be kept below the minimum rate of 15 percent. The Czech Republic and Cyprus dropped objections at the weekend but Poland's new conservative government remains opposed to the deal.