We argue against a single model of VAT rules for public services in our new statement on VAT refund for public services
We published our statement on VAT refund for public services on 25 April 2014.
Members of our working group public services developed this statement in response to the European Commission’s consultation on ‘VAT for public services and activities in the public interest’. The group involved other EUROCITIES forums and working groups in the preparation of our statement, which concerns all local public services.
In our statement, we argue that the current EU VAT rules applying to the public sector work well. The Commission should not propose one single model of VAT rules for public services. The diversity of fiscal regimes reflects the diversity of EU member states’ historic, political, social and economic specificities. Those specificities should be recognised and respected. Local government activities are predominantly local and therefore do not distort intra-EU trade. National refund systems already in place in many member states have proven to be effective. These systems must remain at the discretion of each member state to be adapted to the national situation.
Of the options proposed by the Commission in its consultation document, we would prefer a sector-based approach. A reform by sector would allow public authorities and stakeholders to come to a consensus, and allow reform measures to be fit for purpose. The consultation document provides a basis for discussion on this, and we have proposed contributing to a full analysis of the advantages and drawbacks. Any proposals to change the VAT systems should be discussed with city representatives, to adequately assess the impact on cities of any modification.
You can find out full statement at the link below.