WRITTEN QUESTION P-0197/00 by Elly Plooij-van Gorsel (ELDR) to the Commission. Reduction of the VAT rate for labour-intensive services.
24. 10. 2000 EN Official Journal of the European Communities C 303 E/159 Answer given by Ms Schreyer on behalf of the Commission (24 February 2000) The Commission would point out that the 1998 annual report Protecting the Communityís financial interests and the fight against fraud, which contains only a selection of the cases investigated, does not refer to the case mentioned by the Honourable Member (1). The case in question relates to presumed irregularities or fraud in the management of public contracts at the Joint Research Centre in Ispra, notably with regard to the provision of services. The events took place between 1994 and 1996. Administrative inquiries carried out by the Commission concluded that irregularities had been committed in the award of contracts. A decision was taken to take disciplinary action in respect of four members of staff. The files have been sent to the European Anti-fraud Office (OLAF) for examination. (1) COM(1999) 590 final. (2000/C 303 E/176) WRITTEN QUESTION P-0197/00 by Elly Plooij-van Gorsel (ELDR) to the Commission Subject: Reduction of the VAT rate for labour-intensive services (27 January 2000) As part of the European experiment to reduce VAT on a number of labour-intensive services, the VAT rate, inter alia for hairdressers, was reduced from 17,5 % to 6 % in the Netherlands on 1 January 2000. Reports in the press, number of hairdressers are not passing this VAT reduction on to consumers. including from the Dutch hairdressers association, ANKO, indicate that a large Does the Commission share the view that as a result the aim of the directive, which is to reduce 1. moonlighting and create more jobs, is being thwarted? Does the Commission consider that the criteria of Article 1 of the directive are not satisfied if prices 2. are not being reduced as a consequence of the reduction in the tax rate? 3. What does the Commission intend to do in this case? Answer given by Mr Bolkestein on behalf of the Commission (21 February 2000) The Commission has not to date been informed of the situation described by the Honourable Member. Job creation is indeed the aim of Council Directive 1999/85/EC of 22 October 1999 amending Directive 77/388/EEC as regards the possibility of applying on an experiment basis a reduced VAT rate on labour- the measure is an experiment, which must demonstrate that a VAT intensive services (1). However, reduction actually helps achieve that objective. It is for the national authorities to take the necessary steps to put the experiment into effect. The results must then be assessed by the Member States and reported to the Commission, which will analyse them with a view to deciding on follow-up action. (1) OJ L 277, 28. 10. 1999