Keith Nuthall
THE PORTUGUESE government has been ordered to scrap its reduced five per cent rate of VAT on wine sales, with the European Court of Justice ruling that it contravened the EU's Sixth VAT Directive, which attempts to harmonise the application of sales taxes.

Judges backed the European Commission, which had brought the case. Brussels wants Lisbon to bring its VAT rate for wine in line with the 17 per cent rate for most other goods and services. They dismissed Lisbon's defence that it was trying to raise the rate gradually, raising it at ...

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