On Thursday 26 November, by an overwhelming majority (684 votes in favour to 5 against, with 5 abstentions), MEPs gave the green light to an amendment to the VAT directive that temporarily exempts Covid-19 vaccines, test kits and related services from value added tax (VAT) (see EUROPE 12591/1).
The current VAT rules allow a partial reduction in the costs of Covid-19 vaccination and screening, but do not allow a zero rate to be applied to the vaccines or a zero or reduced rate to in vitro diagnostic medical devices (screening kits).
The amendment will therefore allow CE-labelled in vitro diagnostic medical devices and Covid-19 vaccines approved by the Commission or Member States to benefit from a zero or reduced rate.
This is a temporary measure that should end when the World Health Organization declares the pandemic is over and in any case should not continue beyond 31 December 2022. In due course, the Commission will review the situation to determine whether the measure should be extended.
The European Parliament was only consulted on taxation, but adopted a positive opinion using the urgency procedure. The amendment still has to be formally adopted by the Council of the EU. (Original version in French by Marion Fontana)