VATupdate

European Commission says VAT rates reform negotiations progressing “well”

Question by MEP Chris MacManus (The Left/Ireland)

The current situation whereby VAT has to be applied under EU rules if a patient is renting rather than buying a disability aid further punishes those who cannot afford to buy outright.

1. Taking into consideration the social importance of disability aids and the economic conditions that might force a person to rent rather than buy one, will the Commission examine an amendment to the VAT Directives to allow the supply of a rented disability aid to be eligible for a VAT‑free rating or a reduced rate?

2. Can the Commission provide an update on its plans to reform VAT rules?

Reply by Commissioner Gentiloni

With its proposal to reform the system of value added tax (VAT) rates, the Commission proposed a package that, if adopted, would allow Member States to treat certain supplies more favourably than they are treated under the current rules. This could make the pursuit of certain social policy objectives, such as rendering the renting of aids for people with disabilities, more affordable.
The negotiations are currently progressing well and, although they are now focussed on a positive list of supplies to which the reduced rates may apply rather than on a negative list as in the original proposal , these negotiations are still driven by the idea that the application of reduced or zero VAT rates should, alongside other criteria, take into account social policy aspects.
The Commission stands ready to assist the current Slovenian Presidency and the Member States to reach a successful outcome of the negotiations. The adoption of this proposal requires the unanimous agreement by Member States in the Council.

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