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EU states to cut VAT rate on labour-intensive services
24 Jan '06
3 min read
Council adopted Directive 1999/85/EC, during the year 1999 that concerning VAT on labour-intensive services, which allowed the application of a reduced VAT rate to certain specified labour-intensive services, but only for an experimental period of three years so as to test its impact, in terms of job creation and in combating the 'black' economy.
The list of categories to which Member States were authorised to apply the reduced rates were:
The repairing of: bicycles shoes and leather goods clothing and household linen (including mending and alteration) Renovation and repairing of private dwellings, excluding materials, which form a significant part of the value of the supply.
Window cleaning and cleaning in private households Domestic care services (e.g. home help and care of the young, elderly, sick or disabled) Hairdressing.
Nine Member States (Belgium, Greece, Spain , France , Italy , Luxembourg , the Netherlands , Portugal and the United Kingdom ) requested authorisation to carry out this experiment and submitted applications concerning the sectors from the above list to which they wanted to apply the reduced VAT rate.
These applications were the subject of Council Decision 2000/185/EC of 28th February 2000.
On 3 December 2002, the Council adopted a Directive with the aim of extending for a further year the experimental reduced rates for labour-intensive services to ensure continuity and certainty for the sectors that currently benefit from the reduced rate in expectation of more general proposals concerning reduced rates of VAT.
The list of categories to which Member States were authorised to apply the reduced rates were:
The repairing of: bicycles shoes and leather goods clothing and household linen (including mending and alteration) Renovation and repairing of private dwellings, excluding materials, which form a significant part of the value of the supply.
Window cleaning and cleaning in private households Domestic care services (e.g. home help and care of the young, elderly, sick or disabled) Hairdressing.
Nine Member States (Belgium, Greece, Spain , France , Italy , Luxembourg , the Netherlands , Portugal and the United Kingdom ) requested authorisation to carry out this experiment and submitted applications concerning the sectors from the above list to which they wanted to apply the reduced VAT rate.
These applications were the subject of Council Decision 2000/185/EC of 28th February 2000.
On 3 December 2002, the Council adopted a Directive with the aim of extending for a further year the experimental reduced rates for labour-intensive services to ensure continuity and certainty for the sectors that currently benefit from the reduced rate in expectation of more general proposals concerning reduced rates of VAT.
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