Legal provisions of COM(1999)62 - Amendment of Directive 77/388/EEC as regards the possibility of applying on an experimental basis a reduced VAT rate on labour- intensive services - Main contents
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| dossier | COM(1999)62 - Amendment of Directive 77/388/EEC as regards the possibility of applying on an experimental basis a reduced VAT rate on ... |
|---|---|
| document | COM(1999)62  |
| date | October 22, 1999 |
Article 1
1. the following paragraph shall be added to Article 28:
"6. The Council, acting unanimously on a proposal from the Commission, may authorise any Member State to apply for a maximum period of three years between 1 January 2000 and 31 December 2002 the reduced rates provided for in the third subparagraph of Article 12(3)(a) to services listed in as maximum of two of the categories set out in Annex K. In exceptional cases a Member State may be authorised to apply the reduced rate to services in three of the abovementioned categories.
The services concerned must satisfy the following requirements:
(a) they must be labour-intensive;
(b) they must be largely provided direct to final consumers;
(c) they must be mainly local and not likely to create distortions of competition;
(d) there must be a close link between the lower prices resulting from the rate reduction and the foreseeable increase in demand and employment.
The application of a reduced rate must not prejudice the smooth functioning of the internal market.
Any Member State wishing to introduce the measure provided for in the first subparagraph shall inform the Commission before 1 November 1999 and shall provide it before that date with all relevant particulars, and in particular the following:
(a) scope of the measure and detailed description of the services concerned;
(b) particulars showing that the conditions laid down in the second and third subparagraphs have been met;
(c) particulars showing the budgetary cost of the measure envisaged.
Those Member States authorised to apply the reduced rate referred to in the first subparagraph shall, before 1 October 2002, draw up a detailed report containing an overall assessment of the measure's effectiveness in terms notably of job creation and efficiency.
Before 31 December 2002 the Commission shall forward a global evaluation report to the Council and Parliament accompanied, if necessary, by a proposal for appropriate measures for a final decision on the VAT rate applicable to labour-intensive services."
2. A new Annex K shall be added as set out in the Annex to this Directive.