The European Commission have released the summary report on the public consultation on the Review of existing legislation on VAT reduced rates.
On 8 October 2012 the Directorate General Taxation and Customs Union launched a public consultation1 on its website in the framework of the review of the existing legislation on reduced VAT rates. The review of the current VAT rates structure was one of the priority actions put forward in the Communication on the future of VAT2 presented by the Commission on 6 December 2011.
The Commission also specified that this review should be based on the following guiding principles:
- Abolition of those reduced rates which constitute an obstacle to the proper functioning of the internal market. Reduced rates that were justified in the past can have distortive effects today because the economic, business and legal environments have changed in the meantime;
- Abolition of reduced rates on goods and services whose consumption is discouraged by other EU policies. This could notably be the case for goods and services harmful to the environment, health and welfare;
- Similar goods and services should be subject to the same VAT rate and progress in technology should be taken into account in this respect, so that the challenge of convergence between the on-line and the physical environment is addressed.
- The Commission services made a first evaluation of the current VAT rates structure in the light of the abovementioned guiding principles. This formed the basis of the consultation document inviting stakeholders to reply to 9 specific questions.
- The consultation was closed on 4 January 2013 and, although the deadline for sending contributions had not been extended, replies arriving with a certain delay have also been accepted.
Download the summary report below: