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Taxation: VAT

Volume 704: debated on Wednesday 22 October 2008

asked Her Majesty's Government:

Whether they will support at the November Economic and Financial Affairs Council meeting the European Commission's proposal to amend VAT directive 2006/112/EC to allow member states flexibility on VAT rates for labour-intensive services. [HL5513]

The Government are generally supportive of the legislative proposal adopted by the Commission, consistent with its position of supporting the flexibility of member states to apply their own choice of VAT rates to further their domestic priorities and social objectives, provided that this does not materially affect the functioning of the internal market.

Member states are currently discussing the Commission proposal, and whether any amendments should be made before it is considered by Ministers, at official level in Council working groups. The Government will take a view on the final text when it is submitted to Ministers by the presidency.