WRITTEN QUESTION P-3105/00 by Florence Kuntz (UEN) to the Commission. VAT rates applicable to the catering industry in the European Union.
Date: 2000-09-26
Institutions: European Parliament, Provisional data
Subjects: European tax cooperation, Portugal, Spain, VAT rate, catering industry

22.5.2001

EN

Official Journal of the European Communities

C 151 E/63

respective places of the different energy sources (oil, coal, gas, nuclear, renewables) is the subject of a
Green Paper on security of supply which will be adopted by the Commission by the end of 2000.

With regard to the use of strategic reserves, the Commission will be examining how strategic oil stocks
could be strengthened by pooling their use at Community level. In order to combat speculative move-
ments, ways need to be found, similar to those used in the money markets, to limit price volatility.

As regards the impact on economic forecasts, if oil prices remain around USD 30 per barrel for the rest of
this year, the negative impact on growth of the price rise should be 0,3 % for 2000 and 0,5 % for 2001.
The price rise would add 1 % to inflation.

As far as competition is concerned, the Commission does indeed believe that, even if some cost factors
may vary from one Member State to another, oligopolistic behaviour and a lack of competition in
distribution are the only explanation for the significant price differences, excluding duties and taxes,
between Member States. This diagnosis obviously raises the question of whether or not
there are
infringements of competition law, in particular whether cartels exist (price fixing). The national authorities
of a number of Member States have started investigations on this subject. In Italy and Sweden, sanctions
have been imposed on petrol companies by the competition authorities. In general terms, it is essential to
promote a more open and competitive structure in the fuel distribution sector. A critical factor is the
development of a genuine internal market for refined products (in the wholesale market) to make for ready
and competitive supplies to all distributors, including those who are not national refiners.

(1) COM(2000) 631 final.

(2001/C 151 E/075)

WRITTEN QUESTION P-3105/00

by Florence Kuntz (UEN) to the Commission

(26 September 2000)

Subject: VAT rates applicable to the catering industry in the European Union

Certain Member States, including Spain and Portugal, were granted derogations to the Treaty at the time of
their accession to the European Union, thus making official the practice prevalent in those countries of
applying reduced or low VAT rates in the catering sector. These supposedly transitional arrangements (cid:129)
but with no exact date for the end of the transitional period (cid:129) were introduced in 1992 and the legislation
governing this matter is the 6th VAT directive.

As a result, other Member States which apply a higher rate in the catering industry are seriously harmed
by this distortion of competition, in terms both of employment, given that this area of activity employs
large numbers of people, and of the industry(cid:146)s turnover.

Could the Commission therefore say:

(cid:129) what reasons justify the failure to set a precise date for the end of the transitional period from which
some Community Member States are benefiting with regard to VAT, and what conditions must be met
before a precise date for the end of this period can be proposed to the Ecofin Council?

(cid:129) what measures can be envisaged with a view to putting as early a stop as possible to the serious

violations of the European Union(cid:146)s competition policy taking place in this area of activity?

(cid:129) why certain provisions of the 6th directive prevent the countries with no derogations to its provisions

from lowering the VAT rates applicable to the catering industry?

C 151 E/64

Official Journal of the European Communities

EN

22.5.2001

Answer given by Mr Bolkestein on behalf of the Commission

(30 October 2000)

Under the terms of the Community provisions currently in force in this area (Article 12(3) of the Sixth
Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States
relating to turnover taxes (cid:129) Common system of value added tax: uniform basis of assessment (1), the
standard minimum 15 % rate applies to the catering industry. Increased rates were dropped following the
adoption of Directive 92/77/EEC (2) on the approximation of VAT rates.

However, Article 28(2)of the Directive allows Member States to apply a reduced rate for catering on a
temporary basis on certain conditions.

Specifically, Member States who were obliged to increase their standard rate by more than 2 % on 1 January
1991 and those where a reduced rate was already being applied to the catering industry can apply, or
continue to apply, a reduced rate.

The application period for the exemptions is linked to the transitional period which came into force on
1 January 1993.
though it could be extended
automatically until the definitive VAT arrangement came into force. The changeover was particularly
difficult to implement and it now seems likely that the transitional arrangement will continue to be applied
for several years.

It was intended to last until 31 December 1996,

The catering industry could have benefited from the possibility of a reduced rate for other Member States,
if the Council had not amended the Commission(cid:146)s proposal when negotiating Council Directive 1999/85/
EC of 22 October 1999 amending Directive 77/388/EEC as regards the possibility of applying on an
experimental basis a reduced VAT rate on labour-intensive services. (3) The Council restricted the scope of
the proposal to a list of services which did not include the catering industry.

The Commission(cid:146)s new VAT strategy (4) on the rationalisation of VAT rates will include a review of the
temporary exemptions on rates and their period of validity. It will be carried out following an assessment
of the experience of labour-intensive services.

(1) OJ L 145, 13/6/1977. Directive last amended by Council Directive 1999/85/EC of 22 October 1999 (OJ L 277,

28.10.1999).

(2) Council Directive 92/77/EEC of 19 October 1992 supplementing the common system of value added tax and

amending Directive 77/388/EEC (approximation of VAT rates) (OJ L 316, 31.10.1992).

(3) OJ L 277, 28.10.1999.
(4) COM(2000) 348 final.

(2001/C 151 E/076)

WRITTEN QUESTION P-3109/00

by Freddy Thielemans (PSE) to the Commission

(27 September 2000)

Subject: Implementation of project ALA/92/47 and ALA/92/35 to protect the town of Montero against

flooding

EC funding (project No ALA/92/47 and ALA 92/35) and an agreement between Bolivia and the EC mean
that the town of Montero could enjoy better protection against flooding. The requisite work has however
fallen behind schedule, and will not be completed by 30 September 2000, when the technical assistance
contract expires, although the funding agreement with Bolivia has not yet run out. I am informed that the
Commission(cid:146)s services refuse to extend the deadline for completing the work (for which funding is
guaranteed), a refusal which might make all the effort invested hitherto entirely pointless.

Is the Commission aware of the fact that a possible refusal to extend the deadline will mean that all the
work already carried out will come to nothing? Why are the Commission services refusing to extend the
project until the work is completed?