WRITTEN QUESTION No. 2939/97 by Georges BERTHU to the Commission. Reduced rate of VAT for property renovation
Date: 1997-09-17
Institutions: BERTHU, European Parliament
Subjects: VAT, VAT rate, housing, improvement of housing, local tax, reduced price

30. 4. 98

EN

Official Journal of the European Communities

C 134/39

The Commission is making two specific contributions to help enterprises to prepare for the introduction of the
euro. First, it is reducing the uncertainties which inhibit companies from preparing and investing for the euro
through, for example, the changeover scenario agreed in Madrid in December 1995, and the Council Regulation
(EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro (1). Companies can
therefore  plan  ahead  and  as  a  result  reduce  costs.  Furthermore,  the  Commission  is  working  in  a  variety  of
consultative fora to deal with any outstanding issues (with national administrations, for example on the fiscal and
accounting aspects of economic and monetary union (EMU) and in a series of expert working groups, one of
which is devoted specially to examining the needs of small and medium enterprises).

Second, the Commission is contributing to the diffusion of information to companies. This is being achieved, for
example, via the publication of guides and the sponsorship of conferences. Special attention has been paid to the
concerns of small and medium-sized enterprises, and in June of this year the Association for the monetary union
of Europe, in collaboration with the Commission, published the results of case studies on the preparations of six
small and medium-sized enterprises (SME)s for the euro. In 1997 also, the Euro Institute issued a practical guide
for  the  preparation  of  SMEs.  In  addition,  the  Commission  is  planning  further  studies  and  information
programmes.

(1)  OJ L 162, 19.6.1997.

(98/C 134/46)

WRITTEN QUESTION E-2939/97

by Georges Berthu (I-EDN) to the Commission

(17 September 1997)

Subject: Reduced rate of VAT for property renovation

The Sixth Directive (77/388/EEC (1)) of 17 May 1977 restricts application of the reduced rate of VAT, as regards
the housing sector, to dwellings built or renovated within the framework of the social policy.

Does  not  the  Commission  think  that  the  reduced-rate  option  should  be  extended  to  all  housing  renovation
programmes given that, firstly, this type of activity is much more labour-intensive than new housing construction
and, secondly, the renovation of old properties could help to facilitate the maintenance of rural areas?

Seen  from  these  two  points  of  view,  might  not  housing  renovation  contribute  to  the  implementation  of  the
Agenda 2000 priorities?

(1)  OJ L 145, 13.6.1977, p. 1.

Answer given by Mr Monti on behalf of the Commission

(12 November 1997)

The Commission will shortly present a report to the Council and to the Parliament which will › among other
things › explain in detail its views on the use of reduced VAT rates as a targeted policy instrument (report from
the  Commission  to  the  Council  and  to  the  Parliament  in  accordance  with  Article  12(4)  of  the  Sixth  Council
Directive of 17 May 1977 on the harmonisation of the laws of the Member States relating to turn-over taxes ›
Common system of value added tax: uniform basis of assessment). The report makes also explicit reference to
the question put forward by the Honourable Member.

Generally speaking, the Commission is sceptical on the suitability of VAT as an instrument of labour or other
policy, especially if compared to other, more direct and targeted policy measures. However, the suggestion put
forward by the Honourable Member is currently re-examined by the Commission for application to specific test
cases, against the background of its plan for a new common system of VAT.