European Union government representatives will be denied the chance to debate lowering value-added-tax on CDs when they meet tomorrow (May 12) to discuss a new compromise on general VAT rates.

European Union government representatives will be denied the chance to debate lowering value-added-tax on CDs when they meet tomorrow (May 12) to discuss a new compromise on general VAT rates.

Luxembourg, the current holder of the EU's rotating presidency, will propose a compromise on the heated VAT issue that includes exemptions for various services, but not for music.

VAT on sound recordings is currently set at between 15-25%. Other cultural products such as magazines, newspapers, books, cinemas tickets benefit from reduced rates upwards of 5%.

A coalition of music lobbies has written to Luxembourg prime minister Jean-Claude Juncker, French president Jacques Chirac and French finance minister Thierry Breton to appeal for support in securing lower rates for music.

"Recorded music plays a vital role in European culture and society, but this is not reflected in EU tax policy," the letters explain. "The VAT coalition is therefore counting on the French government to press for a change to the current proposal of the Luxembourg presidency and put an end to the blatant cultural discrimination against sound recordings."

The VAT coalition includes the IFPI, independents' label group Impala, performing artists organization GIART, retailing group GERA-Europe, music publisher bodies ICMP/CIEM and IMPA, the European Music Office, and authors and composers' group GESAC.

The letters point to the EU's constitutional treaty, which sets out the principle that Europe's actions must take account of cultural aspects. "Cultural goods should enjoy a preferential tax treatment if cultural activities are to be promoted and diversity fostered," the letters say.

The letters quote market research that forecasts a reduced VAT rate would give a significant boost to sales of recorded music in Europe.

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