More information on the consultation can be found through this link:

http://ec.europa.eu/taxation_customs/common/consultations/tax/2012_vat_rates_en.htm

 

BRIEF DESCRIPTION OF YOUR ACTIVITY OR YOUR SECTOR

 

Founded in 1988, the European construction product association (CEPMC) is a Brussels-based international non-profit making association. The association is made up of national and European associations that represent Small and Medium-size Enterprises and world-leading companies. CEPMC aims to promote the European construction industry, to share information on EU legislation and standardisation and to provide input in all European construction-related initiatives.

 

DO YOU AGREE TO THE PUBLICATION OF YOUR PERSONAL DATA?

 

Yes

 

DO YOU AGREE TO HAVE YOUR RESPONSE TO THE CONSULTATION PUBLISHED ALONG WITH OTHER RESPONSES?

 

Yes

 

Q1 - ARE THERE ANY CONCRETE SITUATIONS THAT YOU ARE AWARE OF WHEREBY THE APPLICATION OF A REDUCED RATE ON CERTAIN GOODS AND SERVICES BY ONE OR MORE MEMBER STATES IS EFFECTIVELY RESULTING IN MATERIAL DISTORTION OF COMPETITION WITHIN THE SINGLE MARKET? PLEASE EXPLAIN AND, IF POSSIBLE, GIVE AN INDICATION OF THE ECONOMIC IMPACT OF THE DISTORTIVE EFFECTS.

 

We are not aware of any distortion of competition within the single Market due to reduced VAT rates applied to the construction sector.
The construction sector relies on locally provided services which makes possible distortion of competition unlikely. Reduced VAT rates on products or services that are not traded across EU borders - which is certainly the case of construction works, do not affect the proper functioning of the Internal Market.

 

CEPMC would like to express its supports to reduced VAT rates when they apply to areas related to housing. In the sectors where reduced VAT is applied, prices decrease whilst demand, production and employment increase. Therefore there is no loss from national VAT revenues as the number of contracts makes up for the reduced VAT. By lowering VAT rates on some local provided services such as construction works, activities are shifted from the informal economy towards the "formal” one. This is particularly true in labour intensive industries such as construction.

 

Q2 - WHICH ARGUMENTS (SOCIAL, ECONOMIC, LEGAL, ETC) DO YOU WISH TO PUT FORWARD IN THE CONTEXT OF THE ASSESSMENT OF THE REDUCED VAT RATE FOR WATER?

Water is an essential resource for most of our products during the production phase. However, construction products manufacturers have already set up management plans to reduce their water consumption and recycling has also become standard practice. More so, with the European Water Framework Directive, a legislative framework on water pollution and management is already implemented.

 

Considering the current financial crisis, CEPMC considers that the European Commission should rather support the efforts done instead of recommending the raising of VAT taxes.

 

Q3 - WHICH ARGUMENTS (SOCIAL, ECONOMIC, LEGAL, ETC) DO YOU WISH TO PUT FORWARD IN THE CONTEXT OF THE ASSESSMENT OF THE REDUCED VAT RATE FOR CERTAIN ENERGY PRODUCTS?
THE OBJECTIVE OF REDUCED VAT RATES FOR ENERGY PRODUCTS IS TO REDUCE THE RISK OF FUEL POVERTY.

A reduced VAT rate on certain energy products may in a way be considered as a consumption subsidy. Subsidising the use of renewable energy in production would give a positive signal to the industry.

 

However, CEPMC believes that the EU should rather subsidise savings. In this context, CEPMC recommends a reduced VAT rate on all home repair, maintenance and improvement work, including replacement.

 

Q4 - WHICH ARGUMENTS (SOCIAL, ECONOMIC, LEGAL, ETC) DO YOU WISH TO PUT FORWARD IN THE CONTEXT OF THE ASSESSMENT OF THE REDUCED VAT RATE FOR STREET CLEANING, REFUSE COLLECTION AND WASTE TREATMENT? IN YOUR VIEW, HOW CAN THE HIERARCHY SET OUT BY THE WASTE FRAMEWORK DIRECTIVE BE REFLECTED IN THE VAT RATES STRUCTURE?

 

Construction products manufacturers are committed to reduce the amount of waste they generate.

 

Article 11.2 of the Waste Framework Directive (2008/98/EC) stipulates that "Member States shall take the necessary measures designed to achieve that by 2020 a minimum of 70% (by weight) of non-hazardous construction and demolition waste […] shall be prepared for re-use, recycled or undergo other material recovery (including backfilling operations using waste to substitute other materials).”

 

CEPMC believes that the European Union should further promote the reuse and recycling by supporting the development of good practices rather than recommending the increase of taxes.

 

Q5 - IN YOUR VIEW, HOW CAN THE REDUCED VAT RATE FOR HOUSING BE BEST APPLIED IN ORDER TO TAKE THE RESOURCE EFFICIENCY ELEMENT INTO ACCOUNT, AND HOW SHOULD/CAN THIS BE ACHIEVED WITH A MINIMUM OF INCREASE IN THE ADMINISTRATIVE BURDEN FOR BUSINESSES, IN PARTICULAR SME'S, PROVIDING SUPPLIES OF GOODS AND SERVICES IN THE HOUSING SECTOR?

 

CEPMC appreciates the EC intention to link resource efficiency considerations to reduced VAT rates. However this may be extremely complex to achieve in practice.
Many renovation works combine different activities. Some reduce the resource consumption of the building, others may be related to simple repair works. Separating one from the other and defining exactly the activities that increase resource efficiency and those that do not would be difficult. The administrative burden would be disproportionate in particular for SMEs.

 

The European Union has put in place ambitious requirements for new buildings (must have nearly zero energy demand by 2021) in the Energy performance of buildings directive (EPBD). Energy efficiency requirements for the renovation of existing buildings are also covered by the EPBD (building elements, major renovations) and the Energy efficiency directive (national renovation strategies). The reduced VAT rates may not explicitly support resource efficiency, but they facilitate the application of the above directives by stimulating renovation activities. These are increasingly regulated by European rules on energy efficient building. Reduced VAT rates may also balance out the higher costs of buildings that meet the new requirements.

 

More so, a lower VAT rate for construction products made of recycled materials could compensate the disadvantage in price and ease market access for such products.
To assess the overall energy performance of a building and link it to the reduced VAT rate for housing, CEPMC recommends to use the definition provided by the Energy Performance of Buildings Directive (EPBD): "energy performance of a building” means the calculated or measured amount of energy needed to meet the energy demand associated with a typical use of the building, which includes, inter alia, energy used for heating, cooling, ventilation, hot water and lighting.

 

Q6 - DO YOU AGREE THAT THOSE ELECTRONIC SERVICES THAT WOULD QUALIFY FOR THE REDUCED RATE WILL HAVE TO BE PRECISELY DEFINED IN A UNIFORM WAY AT AN EU LEVEL OR DO YOU CONSIDER THAT A BROAD DEFINITION IN THE VAT DIRECTIVE WOULD BE SUFFICIENT?

No opinion

 

Q7 - CONSIDERING THE NEED FOR A UNIFORM AND FUTURE PROOFED APPROACH AT EU LEVEL, WHAT SHOULD BE THE DEFINITION OF AN E-BOOK IN EU-LAW?

No opinion

 

Q8 - CONSIDERING THE NEED FOR A UNIFORM AND FUTURE PROOFED APPROACH AT EU LEVEL, WHAT SHOULD BE THE DEFINITION OF ON-LINE NEWSPAPERS AND ON-LINE PERIODICALS IN EU-LAW?

No opinion

 

Q9 - ARE THE DEFINITIONS LAID DOWN IN THE AUDIOVISUAL MEDIA SERVICES DIRECTIVE SUFFICIENTLY CLEAR WERE A REDUCED VAT RATE ALLOWED FOR ON-LINE RADIO AND TELEVISION BROADCASTING?

No opinion