Brussels, 17/11/2005 (Agence Europe) - In Strasbourg on 14 November, the European Parliament's Economic and Monetary Affairs Committee adopted two advisory reports by Zsolt Laszlo Becsey (Hungary, ALDE) on VAT. The two reports will probably be adopted at the second plenary in November (November 30-1 December).
The MEPs are calling for the extension until 2010 of the application of standard rate VAT of 15%. By a small majority (16 to 10 with 5 abstentions), they recommend a maximum standard rate of VAT of 25%. The Commission backs the idea of setting a maximum rate, although this is not covered by EU legislation. Two Member States (Cyprus and Luxembourg) apply standard VAT rates of 15%, while three others (Denmark, Hungary and Sweden) apply standard VAT rates of 25%.
The MEPs adopted a report updating procedures for refunding VAT on purchases of goods and services in a different Member State. The draft directive stipulates that refund requests will still be processed in the Member State where the tax was paid, with the amount refundable being set in line with the VAT deduction rules of the Member State where the spending was made, with refunds being made directly by that state.