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WRITTEN QUESTION P-2209/02
by Ian Hudghton (Verts/ALE) to the Commission
(11 July 2002)
Subject: VAT on safety helmets and hats in the UK
With reference to Annex H to the Sixth Directive on goods and services
which may be subject to reduced rates of VAT and to the Commission's
document entitled VAT Rates Applied in the Member States of the European
Community, wherein the UK Government's zero rate of VAT for motor cycle
and pedal cycle helmets is recorded, would the Commission please clarify
what category in Annex H the UK Government used to justify application of
VAT at 0% for these items?
Could the Commission further give its
opinion on whether safety hats used by horse riders could be covered by
the definitions used by the UK Government to give motor cycle and pedal
cycle helmets entitlement to zero-rated VAT?
P-2209/02EN
Answer given by Mr Bolkestein
on behalf of the Commission
(13 September 2002)
Under Community value added tax (VAT) legislation, Article 12(3)(a) of the
Sixth VAT Directive (77/388/EEC ) lays down that Member States may apply a
reduced VAT rate of no less than 5% to supplies of goods and services
referred to in Annex H of that directive. As this Annex H does not cover
safety helmets, the standard VAT rate should apply to them.
In addition to this, in the course of negotiations of the Directive, or as
part of their negotiations for joining the Community, certain Member
States have retained separate rules in specific areas, an example in the
United Kingdom being the zero-rates. These rules provide that Member
States who applied exceptional rates on 1 January 1991 may continue to
apply such rates for a further transitional period, under the conditions
lay down in Article 28 of the Sixth VAT Directive. These rules are
transitional, pending the adoption in Council, by unanimous decision, of a
definitive VAT system under which far greater harmonisation is required.
The Council has to date been reticent to adopt such changes.
As an exception to the normal rules, which foresee that the standard VAT
rate should apply to any taxable transaction as a consumption tax, to
avoid distortion of competition, provisions concerning reduced rates
should be construed in the most restrictive way. For zero-rates, this
applies all the more because they are specific derogations granted to some
Member States.
The Commission is of the view that the current United Kingdom zero-rates
could not be extended to cover safety hats worn by horse riders. |
