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EU Launches Consultation On VAT Legislation,
by Ulrika Lomas, Tax-News.com, Brussels
Thursday, March 13, 2008
The European Commission has launched an online consultation to gather views
on the current EU VAT legislation, looking at reduced rates and possible changes.
The VAT Directive provides for the application of a minimum 15% VAT rate throughout the EU. However, it also sets out a restricted list of goods or services on
which member states have the possibility to apply a reduced rate. Moreover,
certain member states are granted some derogations which allow them to apply
reduced rates on other goods or services, thereby preventing a coherent EU legislation, some have argued.
The Commission is consequently seeking stakeholders' opinions and evidence on the impact
that applying reduced VAT rates on different categories of goods or services
has on prices, demand, employment, environment and on any factor which could
distort the smooth functioning of the internal market.
The EC announced this week that the consultation is likely to be of interest to all stakeholders,
in particular businesses which might face distortions in competition from companies
established in member states where reduced rates are applied.
The Commission stated that it will take into account the opinions and views
from the consultation in its legislative proposal planned for July 2008. Comments
must be received by May 12th, 2008.
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