Press Release: Council allows the optional use by member states of reduced VAT rates in certain sectors

The Council today (5.5.09) adopted a directive allowing – on a permanent basis – the optional use of reduced rates of value-added tax (VAT) for certain labour-intensive local services, including restaurant services, for which there is no risk of unfair competition between service providers in different member states. Adoption of the directive follows political agreement reached at the Council's meeting on 10 March 2009. The optional use of reduced VAT rates in certain sectors is one of the actions
identified by the economic recovery plan approved by the European Council in December 2008.