WRITTEN QUESTION No. 2939/97 by Georges BERTHU to the Commission. Reduced rate of VAT for property renovation
30. 4. 98 EN Official Journal of the European Communities C 134/39 The Commission is making two specific contributions to help enterprises to prepare for the introduction of the euro. First, it is reducing the uncertainties which inhibit companies from preparing and investing for the euro through, for example, the changeover scenario agreed in Madrid in December 1995, and the Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro (1). Companies can therefore plan ahead and as a result reduce costs. Furthermore, the Commission is working in a variety of consultative fora to deal with any outstanding issues (with national administrations, for example on the fiscal and accounting aspects of economic and monetary union (EMU) and in a series of expert working groups, one of which is devoted specially to examining the needs of small and medium enterprises). Second, the Commission is contributing to the diffusion of information to companies. This is being achieved, for example, via the publication of guides and the sponsorship of conferences. Special attention has been paid to the concerns of small and medium-sized enterprises, and in June of this year the Association for the monetary union of Europe, in collaboration with the Commission, published the results of case studies on the preparations of six small and medium-sized enterprises (SME)s for the euro. In 1997 also, the Euro Institute issued a practical guide for the preparation of SMEs. In addition, the Commission is planning further studies and information programmes. (1) OJ L 162, 19. 6. 1997. (98/C 134/46) WRITTEN QUESTION E-2939/97 by Georges Berthu (I-EDN) to the Commission (17 September 1997) Subject: Reduced rate of VAT for property renovation The Sixth Directive (77/388/EEC (1)) of 17 May 1977 restricts application of the reduced rate of VAT, as regards the housing sector, to dwellings built or renovated within the framework of the social policy. Does not the Commission think that the reduced-rate option should be extended to all housing renovation programmes given that, firstly, this type of activity is much more labour-intensive than new housing construction and, secondly, the renovation of old properties could help to facilitate the maintenance of rural areas? Seen from these two points of view, might not housing renovation contribute to the implementation of the Agenda 2000 priorities? (1) OJ L 145, 13. 6. 1977, p. 1. Answer given by Mr Monti on behalf of the Commission (12 November 1997) The Commission will shortly present a report to the Council and to the Parliament which will › among other things › explain in detail its views on the use of reduced VAT rates as a targeted policy instrument (report from the Commission to the Council and to the Parliament in accordance with Article 12(4) of the Sixth Council Directive of 17 May 1977 on the harmonisation of the laws of the Member States relating to turn-over taxes › Common system of value added tax: uniform basis of assessment). The report makes also explicit reference to the question put forward by the Honourable Member. Generally speaking, the Commission is sceptical on the suitability of VAT as an instrument of labour or other policy, especially if compared to other, more direct and targeted policy measures. However, the suggestion put forward by the Honourable Member is currently re-examined by the Commission for application to specific test cases, against the background of its plan for a new common system of VAT