WRITTEN QUESTION No. 3187/97 by Jacques DONNAY to the Commission. Amendment of the Sixth Directive on the application of the reduced rate of VAT in the housing sector
Date: 1997-10-16
Institutions: DONNAY, European Parliament
Subjects: European Commission, VAT, VAT rate, approximation of laws, building industry, housing, moonlighting, report, tax system

C 134/106

EN

Official Journal of the European Communities

30. 4. 98

(98/C 134/136)

WRITTEN QUESTION E-3176/97

by Armelle Guinebertie‘re (UPE) to the Commission

(13 October 1997)

Subject: Application of reduced VAT rate in the housing sector

Business in the building sector is currently picking up. In the housing sector, maintenance and refurbishment
account for one third of building companies(cid:146) turnover. However, pursuant to the Sixth Directive of 17 May 1977,
Community  law  restricts  the  application  of  the  reduced  VAT  rate  to  supply,  construction,  renovation  and
alteration of housing provided as part of a social policy (Article 12(3)(a) and Annex H, category 9 of the Sixth
Directive 77/388/EEC) (1).

Could the Union, and more specifically the Commission, require Member States to extend the reduced VAT rate?

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

(98/C 134/137)

WRITTEN QUESTION E-3187/97

by Jacques Donnay (UPE) to the Commission

(16 October 1997)

Subject: Amendment of the Sixth Directive on the application of the reduced rate of VAT in the housing sector

The  Sixth  Directive  of  17  May  1977  (77/388/EEC (1))  limits  application  of  the  reduced  rate  of  VAT  in  the
housing  sector  to  the  supply,  construction,  renovation  and  alteration  of  housing  provided  as  part  of  a  social
policy.

This  restrictive  European  framework  has  prompted  successive  national  governments  to  refuse  to  extend  the
reduced rate to building work other than that connected with social housing.

In the housing sector, however, maintenance and rehabilitation work now represents one third of the turnover of
construction firms, in other words some FF 145 billion net of tax.

Amending  the  Sixth  Directive  to  extend  the  scope  of  the  reduced  rate  of  VAT  for  the  housing  sector  would
undoubtedly  have  an  effect  on  limiting  recourse  to  clandestine  labour  and  help  to  satisfy  housing  quality
requirements.

What does the Commission intend to do to abolish this constraint on undertakings in this economic sector?

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

Joint answer
to Written Questions E-3176/97 and E-3187/97
given by Mr Monti on behalf of the Commission

(25 November 1997)

The Commission(cid:146)s recent report to the Parliament and to the Council (1) explains in detail its views on the use of
reduced VAT rates as an instrument for boosting the building and construction sector and as an incentive for
recuperating some of the activities in this sector from the black economy (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).