Tax, funny? Whatever next?

Apr 14 2005 by Nic Paton Print This Article

News from a "global tax calculation and compliance solutions" firm is not often guaranteed to raise a titter, but this round-up by Taxware of some of the weird and wonderful VAT rules in force around the world may just do so. Tax, funny? Whatever next?

In Morocco, the operation of Turkish-style baths and public showers are exempt from VAT but if you want to emerge clean as well as relaxed, tax of seven per cent must be paid on all soap used.

In Portugal, the selection of pasta can prove to be taxing as Spaghetti and Penne incur only a 5% VAT rate, whereas if you choose Ravioli, Cannelloni or Tortellini, you will be slapped with a 19 per cent VAT rate.

In San Marino, alternative medicine is catching on with the general public but this isn't reflected in the country's VAT policy. While traditional drugs carry a small two per cent VAT rate, alternative medical treatments, such as homeopathy for instance, may incur 17 per cent VAT.

UK residents are exempt from paying VAT on food but not when that food has hallucinogenic properties. According to HM Customs and Excise, the sale of 'magic mushrooms' is subject to the standard VAT rate of 17.5 per cent.

Still on the subject of food in the UK, hot "prepared" food is taxable, but zero-rated if the food is cold when it reaches the customer.

Toasted sandwiches are zero-rated because the purpose of toasting relates to flavour and texture and not to the necessity of the food being hot when consumed.