The countries of the European Union will be able to apply reduced VAT rates on bicycles, internet access or solar panels.
The twenty-seven finance ministers agreed on Tuesday on a harmonization of reduced VAT rules.
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If the rates vary from one country to another, they must be at least 15%, except for a certain number of products and services benefiting from reduced rates of up to 5%, or even zero. This list has been revised to be aligned with the European priorities of green transition and digitization. Reduced rates in favor of polluting products, such as chemical fertilizers or pesticides, will disappear in the next ten years.
Conversely, equipment related to energy savings or digital technology will be able to benefit from reduced VAT.
Health items, such as surgical masks, means of contraception or sanitary tampons may also benefit.
As well as a number of cultural goods and services, such as theater, cinema, concerts, books or newspapers.
France also succeeded in registering an exception for horse breeding.
And the exemptions historically granted to certain states will now be open to all.
The directive also allows them to
“quickly” change
their VAT rules in the event of exceptional events, such as pandemics or natural disasters.
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This agreement is the culmination of more than four years of negotiations on this controversial issue.
The initial project, launched in 2018, proposed to leave states free to choose goods and services benefiting from reduced rates, and to abandon a previous list of eligible products dating from 1992.
The text must now be considered by the European Parliament for opinion by March, before being resubmitted to the Member States for formal adoption.
