§ Mr. Cormackasked the Chancellor of the Exchequer whether he will introduce legislation to ensure that the horse is treated as an agricultural animal for all tax purposes.
§ Mr. Cormackasked the Chancellor of the Exchequer whether he will take steps to ensure that there is harmonisation of value added tax on horses within all countries of the European Community.
§ Mr. HayhoeThe VAT treatment of horses in the European Community is governed by the provisions of the sixth directive on he harmonisation of VAT. This provides that supplies and imports of horses should be taxable on the full selling price or import value. The position in all member states conforms to this except in Greece, which has not yet introduced a value added tax, and in Ireland, which is permitted to continue to exempt thoroughbred horses under a "temporary" derogation from the directive. The European Commission has prepared a report on the temporary derogations, but has not yet made proposals for ending any of them. It should be appreciated that ending of derogations, like other measures of harmonisation, require the unanimous agreement of the Council of Ministers to proposals by the Commission.