EU states to cut VAT rate on labour-intensive services
24 Jan '06
3 min read
Under the terms of the scheme the nine Member States have reported on their experiences to date.
On 2 June 2003, the European Commission submitted a report on the experimental application of a reduced rate of VAT to certain labour intensive services.
Report (COM(2003) 309) from the Commission to the Council and the European Parliament : Experimental application of a reduced rate of VAT to certain labour-intensive services.
Commission Services evaluation report : Experimental application of a reduced rate of VAT to certain labour-intensive services.
On 10 December 2003 , the European Commission decided to propose to allow nine Member States to continue to apply for an additional two years (i.e. until 31 December 2005 ) the reduced rates of Value Added Tax (VAT) they apply to specified labour-intensive services (see IP/03/1693).
The text of the proposal (COM(2003) 825) On 10 February 2004 , the Council decided to extend reduced rates for labour intensive services up to 31 December 2005 (Annex K of the 6th VAT Directive).
On 21 April 2004 the European Commission proposed to allow acceding countries to apply, until 31 December 2005 , reduced rates to some labour intensive services.
The Czech Republic and Poland have announced their wish to apply reduced rates on certain labour-intensive services.
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