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New reduced rate of VAT on some services |
The European Commission today made a proposal to change the EC VAT law so Member States can apply reduced VAT rates for some specific services on a permanent basis. The sectors concerned are mainly so called labour-intensive services and locally supplied services of a similar nature, such as:
- Supply of restaurants and catering services, excluding alcoholic beverages
- Minor repair of tangible movable goods, including bikes but excluding other means of transport. Examples include shoes, clothes, computers, watches, cleaning and maintenance services of all these goods and, in this case, other means of transports.
- Domestic care services (e.g. home help and care of the young, elderly, sick or disabled)
- All personal care services (including hairdressing, beauty services, etc.)
- Gardening services
- Renovation and maintenance services provided to places of worship, cultural heritage and historical monuments, as recognised by Member States.
- The housing sector will no longer be limited to services linked to a social policy, as it is currently, but will be broadened to include the supply and construction of all housing, as well as all services related to the housing sector (including renovation, maintenance, cleaning, etc).
- The definition of books could be widened to include audio-books. These are defined as “CDs, CD-ROMs or any physical support that predominantly reproduce the same information content as printed books” and which do not include other material such as games.
- The Commission is currently carrying out a number of studies concerning the possible use of reduced rates for energy saving materials or energy efficient goods and services.
THE CONCLUSION
If your business is involved in making any of these supplies, the business should start considering what changes it might need to make if these changes are brought in before 2010, as the European Commission’s Press Release currently indicates.
If you have any queries or concerns, please do not hesitate to contact us at info@intrust-manx.com
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