European Solar Thermal Industry Federation

ESTIF takes part in EU VAT consultation

Date: 31 Mar 2017
Category: Solar Heat News

On 7 April 2016, the Commission adopted an Action Plan on VAT - Towards a single EU VAT area. The Action Plan provides clear orientations towards a robust single European VAT area and also sets out actions to adapt the VAT system to the needs of SMEs and proposes options for a modernised policy on EU rules governing VAT rates.

The consultation aimed at obtaining stakeholders views' on the following aspects:

  • The need for EU action in the field of VAT rates;
  • The proper balance between harmonisation and Member States autonomy in setting VAT rates;
  • The problems and risks linked to differentiation of VAT rates within the Single Market;
  • The desirable direction for reform
  • Stakeholders' views on the proposed policy options.

ESTIF strongly believes that the VAT system in the European Union should be aligned to the objectives of the Energy Union and become an effective tool (and not a barrier) to promote investments in energy efficiency and renewable energy.

Council Directive 2006/112/EC (VAT Directive) should be updated so to take into account technological and regulatory developments in the field of energy and climate action. In particular, it is suggested to extend the exemptions to the application of the standard rate of VAT to renewable energy and energy efficient goods and services.

The standard rate of VAT to be applied by all EU countries to goods and services is no less than 15 %. Article 98 provides that EU countries may apply 1 or 2 reduced rates of no less than 5 % to specific goods or services listed in Annex III to the Directive. In order to promote investment in renewable energy and energy efficiency, ESTIF recommended to include renewable energy equipment and to extend the exemption to construction and renovation works intended to reduce the input of non-renewable primary energy.

To access the Commission webpage on the VAT consultation, please click here.

For more information, contact Stefano.lambertucci(at)estif.org.

 

 

 

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