Brussels, 06/12/2006 (Agence Europe) - At the end of November, the Commission proposed to allow Romania to apply a reduced rate of value-added tax (VAT) to certain highly labour-intensive services, as of 1 January 2007, the date of its forthcoming accession to the EU. The new rate will apply to the following services: repairs to clothing and household linens and home care.
At the end of March, Romania made an official request to the Commission. It will become the 18th Member State to apply reduced VAT rates for this kind of service (see EUROPE 8926). Bulgaria opted not to take up this option. In line with directive 2006/18/EC, the Commission will present, no later than the end of June 2007, a report on the impact of reduced rates applied to locally-provided services, including restaurant services, particularly in terms of job creation, economic growth and the smooth functioning of the internal market. (mb)