EU tells Greece to cut VAT on private schools

The European Commission has warned Greece that last month’s rise in VAT to 23% on fee-paying private schools was in breach of the EU VAT Directive.

The rise was part of a package of VAT rate increases and simplifications by Greece to help secure a third round bail out from its creditor.  This included withdrawing VAT discounts on restaurant services and holiday islands.

Under the EU VAT Directive, education service fees for tuition also provided by state schooling should not be charged with the standard VAT rate.

Greece has until this week to respond and withdraw the VAT imposition.  If it does, it will have to propose alternate fund-raising measuers for its creditors.