Brussels, 28/11/2005 (Agence Europe) - The Council of Presidents of the European Construction Industry Federation (FIEC) has taken a clear position in favour of reduced rates of VAT in the European construction industry. In a press release of 25 November, FIEC says that “the non-renewal of this measure would threaten close to 250,000 jobs with effect from 2006” and “would mainly affect SMEs". Directive 99/85/EC authorising the application of reduced VAT rates in certain sectors effectively comes to an end on 31 December. At the Ecofin Council of 8 November, the EU's finance ministers did not manage to reach an agreement and postponed until December any decision on the matter, which has caused divisions among the Member States (see EUROPE 9064). FIEC, which believes that in the construction sector “the application of different VAT levels in the various Member States does not hinder the development of the Internal Market and does not create any distortion of competition”, is calling on the UK Presidency to step up efforts to arrive at an agreement on a definitive scheme for reduced rates of VAT at the Ecofin Council on 6 December.
The Administrative Council of the UEPC (European Union of Developers and House-Builders), meeting on 10 and 11 November in Amsterdam, also gave its support to the European Commission, which has spoken in favour of a reduced rate of VAT for all new housing without distinction and maintaining the very favourable VAT schemes in certain Member States.