2000/185/EC: Council Decision of 28 February 2000 authorising Member States to apply a reduced rate of VAT to certain labour-intensive services in accordance with the procedure provided for in Article 28(6) of Directive 77/388/EEC
Date: 2000-02-28
Institutions: Council of the European Union
Subjects: EU Member State, VAT, VAT rate, approximation of laws, provision of services, tax harmonisation

L 59/10

EN

Official Journal of the European Communities

4.3.2000

COUNCIL DECISION

of 28 February 2000

authorising Member States to apply a reduced rate of VAT to certain labour-intensive services in
accordance with the procedure provided for in Article 28(6) of Directive 77/388/EEC

(2000/185/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Sixth Council Directive 77/388/EEC of 17
May 1977 on the harmonisation of the laws of the Member
States relating to turnover taxes — common system of value
added tax: uniform basis of assessment (1), and in particular
Article 28(6) thereof,

(8)

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Under Article 28(6) of Directive 77/388/EEC,
the
Council, acting unanimously on a proposal from the
Commission, may authorise any Member State that has
submitted an application in accordance with the proce-
dure and conditions provided for in that Article, to
apply a reduced rate of VAT to certain labour-intensive
services.

The services concerned must meet
the conditions
provided for in the Directive and be included in the list
in Annex K to the Directive.

This is an experiment limited to a maximum period of
three years
running from 1 January 2000 to 31
December 2002.

However, the introduction of such a targeted reduction
in the VAT rate entails some risk to the proper opera-
tion of the internal market and tax neutrality; provision
should therefore be made for an authorisation period for
for the
a full and clearly defined three-year period,
measure to be on an optional basis for Member States,
and for its scope to be made subject to strict conditions
so that it remains verifiable and limited.

In view of the experimental nature of the measure, a
detailed assessment of its impact in terms of job creation
and efficiency should be carried out by the Member
States which implement it and by the Commission.

The Member States that have submitted an application
have complied with the procedure and conditions set
out in Directive 77/388/EEC.

Three Member States, France, Luxembourg and the
Netherlands have applied for authorisation to apply a
reduced rated of VAT exceptionally to a third category

the services listed in Annex K;

of
in each case the
reduction in rate in the third of the sectors selected can
have only an insignificant economic impact.

The United Kingdom has applied for authorisation to
apply a reduced rate of VAT to dwelling-related services
only in the Isle of Man;
in the light of the specific
territorial rules governing the status of the Isle of Man,
including Article 299(6)(c) of the Treaty, the Treaty on
the accession of the United Kingdom and Article 3(4) of
Directive 77/388/EEC, and in the light of the fact that
the rules on the location of such services will ensure that
they are taxed where the dwelling is located, applying a
reduced rate of VAT carries no risk of distortion of
competition; however, restricting the reduced rate to the
Isle of Man is something which can be authorised only
as an exceptional measure. In relation to other territories
of Member States where the Treaty and Directive 77/
388/EEC are fully applicable, such a step could not be
taken without
jeopardising the principle of applying
uniform rates in a single Member State.

(9)

The other Member States have been informed about the
applications for authorisation.

(10)

This Decision will have no impact on the Communities'
own resources derived from VAT,

HAS ADOPTED THIS DECISION:

Article 1

In accordance with Article 28(6) of Directive 77/388/EEC, the
following Member States are hereby authorised to apply the
reduced rates provided for in the third subparagraph of Article
12(3)(a) for a maximum of three years running from 1 January
2000 to 31 December 2002 to the services for which they
have submitted applications in accordance with the required
procedure, and which are listed under their names below:

1. the Kingdom of Belgium for the sectors listed at points 1

and 2 of Annex K to Directive 77/388/EEC:

— small services for repairing:

(a) bicycles;

(b) shoes and leather goods;

(1) OJ L 145, 13.6.1977, p. 1. Directive as last amended by Directive

1999/85/EEC (OJ L 277, 28.10.1999, p. 34).

(c) clothing and household linen (including mending

and alteration),

4.3.2000

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Official Journal of the European Communities

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— renovation and repairing of private dwellings more than
five years old, excluding materials which form a signifi-
cant part of the value of the supply;

2. the Hellenic Republic for the sectors listed at point 1, last
indent, and point 4 of Annex K to Directive 77/388/EEC:
— repairing of clothing and household linen (including

mending and alteration),

— domestic care services;

3. the Kingdom of Spain for the sectors listed at points 2 and

5 of Annex K to Directive 77/388/EEC:
— bricklaying for the repair of private dwellings excluding
materials which form a significant part of the value of
the supply,
— hairdressing;

4. the French Republic for the sectors listed at points 2, 3 and

4 of Annex K to Directive 77/388/EEC:
— renovation and repairing of private dwellings completed
more than two years ago, excluding materials which
form a significant part of the value of the supply,

— domestic care services,
— window cleaning and cleaning in private households;

5. the Italian Republic for the sectors listed at points 2 and 4

of Annex K to Directive 77/388/EEC:
— renovation and repairing of private dwellings excluding
materials which form a significant part of the value of
the supply,

— domestic care services;

6. the Grand Duchy of Luxembourg for the sectors listed at
points 1, 3 and 5 of Annex K to Directive 77/388/EEC:
— small services for repairing:

(a) bicycles;
(b) shoes and leather goods;
(c) clothing and household linen (including mending

and alteration),

— hairdressing,
— window cleaning and cleaning in private households;

7. the Kingdom of the Netherlands for the sectors listed at
points 1, 2 and 5 of Annex K to Directive 77/388/EEC:
— small services for repairing:

(a) bicycles;
(b) shoes and leather goods;
(c) clothing and household linen (including mending

and alteration),

— hairdressing,
— painting and plastering services for the renovation and
repairing of private dwellings more than 15 years old,
excluding materials which form a significant part of the
value of the supply;

8. the Portuguese Republic for the sectors listed at points 2

and 4 of Annex K to Directive 77/388/EEC:
— renovation and repairing of private dwellings, excluding
materials which form a significant part of the value of
the supply,

— domestic care services;

9. the United Kingdom for one sector, referred to in point 2 of
Annex K to Directive 77/388/EEC, but for the Isle of Man
only:
— renovation and repairing of private dwellings, excluding
materials which form a significant part of the value of
the supply.

Article 2

Before 1 October 2002 each of the Member States listed in
Article 1 shall draw up a detailed report containing an overall
assessment of the measure's effectiveness in terms of job crea-
tion and efficiency and forward it to the Commission.

Article 3

This Decision shall take effect on the day of its publication in
the Official Journal of the European Communities.

It shall apply from 1 January 2000 to 31 December 2002.

Article 4

This Decision is addressed to the Member States referred to in
Article 1.

Done at Brussels, 28 February 2000.

For the Council

The President

J. PINA MOURA