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French VAT rates on the rise

31 Jan 2012

Hot on the heels of the increase of France's reduced VAT rate from 5.5% to 7%, President Sarkozy has said in an television interview that his government will be looking to increase the normal VAT rate from 19.6% to 21.2% this October. The increase is another measure aimed at bolstering disappointing economic growth ahead of Sarkozy's run for re-election in April and May this year.

The reduced rate of VAT was changed as at 1st January 2012 and it affected food provided in restaurants, public transport and repairs to domestic dwellings and cleaning services although essential foodstuffs remain at 5.5%.  Books will also be affected by the reduced rate increase although they will remain at 5.5% until 1 April 2012.