Back in March 2008, the EC ran a public consultation on the review of the existing legislation on VAT reduced rates. The results revealed that a majority of respondents support the EC analysis. Indeed, as it was already stated in this consultation paper, the EC would like to apply permanently reduced rates in some sectors (the housing sector, restaurants and catering services, audio-books…etc).

This proposal is limited in its scope as there has not been any clear orientation from the Council of the European Union (EU) to the EC Communication “on VAT rates other than standards VAT rates” from July 2007. Therefore, the proposal only seeks to deal with urgent matters.

The EC also made some technical drafting adaptations for certain categories that are subject to reduced VAT rates. The expression “reception of radio and television broadcasting services” would be replaced by “radio and television broadcasting services”. The main reason for this rephrasing is the fact that these services are taxable supplies but not the reception; therefore the phrase “reception of” has been deleted.

Next steps: Assessment of the EC Proposal by the European Parliament and the Council of the EU.

For further information, please click here.
To access the EC Proposal amending Directive 2006/112/EC, please click here.
To access the 2007 EC Communication on VAT rates other than standard VAT rates, please click here.