The EU Economy and Finances Council (ECOFIN) met on 7 December 2021 to update and modernize the list of goods and services for which reduced VAT rates are allowed (Annex III of the VAT directive), taking into account the digital transformation of the economy.
To ENPC members’ satisfaction Children’s clothing and footwear as well as the supply of children’s car seats (Item 24) have been added to the list of Annex III.
The update of the list was driven by a number of principles, such as the benefit of the final consumer and the general interest. However, to prevent a proliferation of reduced rates, the Council decided to limit the number of items to which reduced rates could be applied.
The Council also decided to ensure that all member states are treated equally. To achieve this, existing derogations that allowed some member states to apply preferential rates for certain products were opened to all member states, provided that they are compatible with the agreed principles.
Next steps:
Waiting for the Parliament Opinion.