The impact of VAT reduced rates and its possible consequences at EU level, Brussels - Main contents
| date | July 5, 2007 |
|---|---|
| city | Brussels, Belgium |
| location | Berlaymontgebouw  |
| attending | L. (László) Kovács i et al. |
| organisation | European Commission (EC) i |
Following the Council's request of February 2006, the Commission is going to present a Communication on the impact of VAT reduced rates in terms of job creation, economic growth and the proper functioning of the internal market. The Communication is based on a study carried out by an independent economic think-tank.
The aim of the Communication is to launch a political debate on the use of VAT reduced rates and on the possible rationalisation of current EU legislation. Therefore, the Commission gives guidelines to feed this political debate. The Commission asks Member States to examine the Communication and to give political orientation for a possible future modification of the EU legislation.
The Communication does not contain any proposal to include new types of goods or services into the reduced rates' category currently into force.
The current situation, as regards VAT rates applicable in the Community, remains highly disparate and very complex. Yet, the basic rules are simple: supplies of goods and services subject to VAT are normally subject to a standard rate of at least 15%, but the Member States may opt to apply one or two reduced rates of not less than 5% to goods and services enumerated in a restricted list. However, these simple rules are complicated by a multitude of derogations granted to certain Member States – in some instances a majority of Member States – during the negotiations preceding the introduction of the VAT Directive (1992) or their Acts of Accession, derogations which are denied to the others.
Press Conference by Commissioner Kovacs in the Berlaymont press room at 11.30.
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-EbS coverage
European Commission websites:
Current legislation on VAT reduced rates (labour intensive sector):
VAT rates currently into force in the 27 Member States:
IP/03/1024 "VAT: the Commission proposes rationalisation and simplification of reduced rates"
Commissioner Laszlo Kovacs' website:
http://ec.europa.eu/commission_barroso/kovacs/index_en.htm
Maria Assimakopoulou +32 2 295 98 42
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