VAT: Reviewing reduced rates for more efficient tax systems

Citizens, businesses and other stakeholders are being asked for their opinion on certain reduced VAT rates, in a public consultation launched by the Commission today. They are also asked to consider what a change in EU rules in this area might imply. Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: "It is high time that we take a fresh look at reduced VAT rates".

 

Citizens, businesses and other stakeholders are being asked for their opinion on certain reduced VAT rates, in a public consultation launched by the Commission today. They are also asked to consider what a change in EU rules in this area might imply. The consultation is part of the wider work being done to fundamentally reform the EU VAT system, in order to make it simpler, more efficient and more robust. It will run until 3 January 2013.

Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: "It is high time that we take a fresh look at reduced VAT rates. Member States need new revenue sources, while businesses need simpler tax systems with fewer compliance costs. Today we are asking whether certain reduced VAT rates are delivering what they seem to promise, or whether they pose more problems than they are worth."   

In line with the principles set out in the EU VAT Strategy (IP/11/1508), today's consultation focuses on 3 specific areas where reduced VAT rates need to be reviewed. First, respondents are asked whether any current reduced rate is distorting competition within the Single Market. Secondly, the list of goods and services which can benefit from a reduced rate was agreed by Member States many years ago, and EU policy has developed and evolved since then. Therefore, respondents are asked whether certain reduced VAT rates now contradict EU policy objectives. Here, answers should be concentrated on the reduced rates for water, energy, waste management and housing. Finally, the consultation asks how similar goods and services should be treated for VAT purposes, taking into account technological developments.

This consultation is part of an assessment process, and the Commission is not proposing the abolition or introduction of any reduced VAT rate at this stage. The results of the public consultation will feed into the preparation of new proposals on VAT rates, which the Commission will present next year.

The public consultation will run for 12 weeks, it is available on: http://ec.europa.eu/taxation_customs/common/consultations/tax/index_en.htm

 

Last update: 24/04/2013 |  Top