WRITTEN QUESTION No. 3896/97 by Joaquín SISÓ CRUELLAS to the Commission. Reducing VAT in labour-intensive sectors
Date: 1997-12-11
Institutions: European Parliament, SISO CRUELLAS
Subjects: VAT, VAT rate, competition law, fight against unemployment, job creation, provision of services, reduced price, tax system

C 196/32

EN

Official Journal of the European Communities

22. 6. 98

(98/C 196/45)

WRITTEN QUESTION E-3896/97

by Joaqu(cid:14)·n Siso· Cruellas (PPE) to the Commission

(11 December 1997)

Subject: Reducing VAT in labour-intensive sectors

Commissioner  Monti(cid:146)s  proposal  to  introduce  a  reduced  VAT  rate  on  an  experimental  basis  for  certain
labour-intensive  sectors  has  been  more  overwhelmingly  endorsed  by  the  sectors  potentially  concerned,  who
claim that this could have a positive impact on employment. The European Union of Craft Workers and Small
and  Medium-Sized  Undertakings  (Eucsmu),  the  Federation  of  National  Associations  of  Hotels,  Restaurants,
Cafes  and  similar  establishments  in  the  European  Union  and  the  European  Economic  Area  (Hotrec)  and  the
European Industry and Building Federation (EIBF) have expressed the hope that a reduced VAT rate will be
applied  to  their  services,  in  the  belief  that  this  would  enhance  their  ability  to  create  jobs  and  counteract
competition from third countries, and at the same time restrict fiscal competition between the Member States of
the Union.

I understand that the Commission is currently studying the issue of reducing VAT for certain services and that a
proposal for a directive may be adopted.

Can the Commission tell me which sectors will, in principle, benefit from its proposal, and whether it wishes to
introduce the general application of a reduced VAT rate for all services within those sectors?

Answer given by Mr Monti on behalf of the Commission

(13 February 1998)

The Commission(cid:146)s ideas on the Honourable(cid:146)s written question are set out in detail in its communication to the
Council (cid:145)Job creation. Possibility of a reduced VAT rate on labour-intensive services for an experimental period
and on an optional basis(cid:146) (1).

In  this  communication,  the  Commission  states  that  the  services  identified  for  the  possible  application  of  a
reduced  VAT  rate  for  labour-intensive  sectors  should  be  genuinely  labour  intensive,  supplied  directly  to
consumers, principally those using low skilled labour, predominantly local (in order to avoid the problem of
cross  border  trade  distortion),  and  those  where  there  is  the  strongest  link  between  reduction  in  prices  and
additional demand and employment.

The Commission suggests that the following categories are likely to offer the best opportunity for job creation
and that Member States could, if the Commission approach is welcome by the Council, choose from within them:

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repair services on movable tangible property (including bicycles but excluding other means of transport);

renovation and repair services on residential housing (except new construction);

leisure  parks,  cleaning  services,  laundries  and  domestic  caring  services  such  as  home  help,  care  of  the
young, disabled, elderly or infirm.

For the time being, the Commission is not considering the general application of a reduced VAT rate for all
services within labour-intensive sectors.

(1)  SEC(97) 2089 final.

(98/C 196/46)

WRITTEN QUESTION E-3900/97

by Nel van Dijk (V) to the Commission

(11 December 1997)

Subject: International legal assistance when asylum-seekers are transferred from one country to another

The  Netherlands  bar  association  and  the  Standing  Committee  of  experts  in  international  aliens,  refugee  and
criminal law in the Netherlands are calling for rules to ensure that if an asylum-seeker is transferred, pursuant to