Brussels, 05/12/2005 (Agence Europe) - Further to the debate in plenary, in Brussels on 1 December, on a range of issues related to value-added tax, the European Parliament has adopted three resolutions (see EUROPE 9080).
The resolution adopted last Thursday on reduced rates of VAT on highly labour-intensive services takes up the position expressed by Pervenche Berès, president of the economic and monetary committee of the EP, during the debate. The Parliament is proposing to extend, until the end of 2006, the experiment launched six years ago in nine Member States (Belgium, Greece, Spain, France, Italy, Luxembourg, the Netherlands, Portugal and the United Kingdom), which have applied reduced rates of VAT on services such as home care, window cleaning, small repair services or the refurbishment of private houses. Then, the Commission is to present an overall assessment based on data gathered during the whole period of application of the experiment, in order to be able to present an overall view of its economic impact. Further to this assessment, the sectors with satisfactory results will be included in annex H of directive 77/388/EEC (which includes services permanently benefiting from reduced rates). A plan to phase out derogations will, on the other hand, be implemented for sectors which did not show positive results, due to these derogations. During the debate, members of the Socialist group laid great emphasis on the need for "in-depth debates" and called upon the finance ministers to "stop hiding behind the rule of unanimity".
Although the Ecofin Council must imperatively reach an agreement on the delicate issue of the application of reduced rates at its meeting of 6 December, the Parliament is calling on the ministers, amongst other things, to approve without delay the proposed directive of 14 December 2004, allowing such of the new Member States as wish it to apply reduced rates on certain highly labour-intensive services themselves, in order to put an end to a "discriminatory situation". Marie Anne Isler Béguin, French Green, welcomed this vote, warning: "the immediate passage to normal VAT rates would be disastrous, causing not only price hikes, but, even worse, job losses in the sectors in question".
The Parliament also adopted two legislative resolutions at the conclusion of the debate on two Becsey reports (consultation). The first calls for the extension, until 2010, of the application of the current minimum level of VAT, which is set at 15% and is due to expire on 31 December, and to set the normal maximum level at 25%, until 2010. The second resolution aims to speed up procedures by which VAT is reimbursed, particularly for businesses established outside their country of origin. The EP's amendments focus mainly on the question of lead times. According to the EP, the time taken for the reimbursement to be made should be three months and run from the date on which the request for reimbursement was made to the date on which payment was made. In the case of an additional request for an investigation by the tax authorities of the Member State making the reimbursement, this lead time should not exceed four months.