Brussels, 03/11/2006 (Agence Europe) - At the Ecofin Council on 7 November (see related article), French finance minister Thierry Breton will present a request from France for permission to apply a reduced rate of value added tax (VAT) for the press on-line - for which a minimum level of 15% is applied - and the “paper” press, which already enjoys a minimum reduced level of 5%.
France put this issue on the Ecofin Council agenda, not so for decision on Tuesday, but with a view to the subsequent meeting of finance ministers at the end of November, which is due to consider the VAT package. With little progress having been made in discussions on this legislative package under Finnish Presidency, it is unlikely that it will be adopted in 2006, said a diplomatic source. As part of the package, directive 2002/38/EC on VAT applicable to broadcast, television and some electronic services is likely to be extended once again, after a first extension of six months in June. The French authorities wish, then, to use this extension to include a clause, authorising a reduced level of VAT for the press on-line, in directive 2002/38/EC.
The Commission and Finnish Presidency, however, would prefer that this request was linked to a future discussion on reduced VAT levels, when the Commission presents a specific report in June 2007. The VAT package seeks to simplify the requirements for VAT returns by creating a system of one-stop shops and by changing the place of supply of some services (see EUROPE 9206). (mb)