Nyheter

Dear EMH members and contacts,

Attached you will find a consultation paper of the EC about VAT reduced rates and the EMH response.

We ask you to endorse this response by contacting your national financial ministry or other competent authorities.

Kind regards,

Thedo Fruithof
Secretary EMH

www.european-maritime-heritage.org

Reduced VAT rates for Repair, restoration and maintenance of cultural heritage and historical monuments?

It specifically, on page 12., mentions Repair, restoration and maintenance of cultural heritage and historical monuments; as an activity that qualifies for reduced VAT Rates.

The European Commission has just launched an online consultation on the review of the existing legislation on VAT reduced rates, based on the study commissioned from Copenhagen Economics.

Please see the attached consultation document.

In brief: The consultation includes the question of whether this temporary provision of reduced rates of VAT should be made permanent or should be abolished altogether after a long period of repeated extensions. Another important point for the heritage sector is whether the possibility for Member States to apply reduced rates should be extended to similar services not currently included in the present provision, with specific reference to the repair, restoration and maintenance of cultural heritage and historical monuments (see pages 5, 7, 11 and 12 of the consultation document).

For further information: http://ec.europa.eu/taxation_customs/common/consultations/tax/article_4850_en.htm

Extracts from the paper:

Consultation paper. Review of existing legislation on VAT reduced rates

“Council Directive 2006/18/EC of 14 February 2006. This Directive foresees the third prolongation of the experiment on reduced rates for labour-intensive services until the end of 2010, and a possibility to apply a reduced rate to district heating under the same procedure as currently provided for in the Directive for natural gas and electricity. (..) to give Member States more flexibility to adopt reduced rates, in particular concerning locally supplied services.

The ECOFIN meeting of 4 December 2007, adopted the following conclusions (included in doc 15671/2/07 REV 2/FISC 162), whereby (in summary) it:

• INVITES the COREPER and the Working Group on Tax Questions to prepare a Council discussion on the economic impact of the application of reduced rates and whether or not reduced VAT rates are an appropriate instrument to achieve sector political aims; will return to those points in 2008;

• TAKES NOTE of the Commission intention to present a proposal on reduced rates in 2008."

In 1999 the Council adopted Directive 1999/85/EC concerning VAT on labour-intensive services which allowed the application of a reduced VAT rate to certain specified labour-intensive services,... [one such activity is] ...renovation and repairing of private dwellings, excluding materials which account for a significant part of the value of the service supplied;

THEIR LOCALLY SUPPLIED SERVICE

Furthermore, the question arises whether the possibility for Member tates to apply reduced rates should be extended to similar services not listed above, where there is no impact on the proper functioning of the internal market. In general terms these services are referred to as locally supplied services. Their basic characteristic is that they cannot be supplied from a remote location and are largely directed to the local market.

Examples of what other locally supplied services could be are:

Renovation, alteration, repair, maintenance and cleaning of places of worship, schools, or other non commercial buildings;

6. HOUSING. Currently, Member States are allowed to apply a reduced rate to the "provision, construction, renovation and alteration of housing, as part of a social policy".

Legislation, could be extended as follows:

– provision, construction, renovation and alteration of housing, as part of a social policy;

Member States may also provide for a reduced rate to these activities relating to housing not provided as part of a social policy – "small renovation, repair, maintenance and cleaning of housing": (p. 12) "Repair, restoration and maintenance of cultural heritage and historical monuments"