Conclusies EcoFin: rente op spaartegoeden, BTW en Franse overzeese gebiedsdelen (en)

Savings taxation

Taxation Commissioner Frits Bolkestein provided an up-date to the Council concerning the negotiations on savings taxation with Andorra, Liechtenstein, Monaco and San Marino. The Commission has been engaged in intensive negotiations with them to reach agreement on the application by these four countries of savings tax measures "equivalent" to those agreed within the EU concerning interest income of EU residents. As regards the draft agreement with Switzerland concerning the taxation of savings income, Commissioner Bolkestein noted that Switzerland has indicated that it will not sign the agreement until a satisfactory result on other bi-lateral negotiations has been achieved.

The Council unanimously supported the negotiating position of the Commission, and agreed that no further counter-requests from the above-mentioned third countries could be accepted. As regards the savings tax agreement with Switzerland (text agreed in 2003), the Council unanimously agreed that this agreement constitutes, in itself, a fair and balanced deal for both parties, and that it should be concluded without further delay and without linkage to ongoing negotiations in other areas.

The Council, finally, reiterated its strong commitment to a timely conclusion of savings tax agreements with European third countries, as well as with British and Dutch dependent and associated territories, so as to allow the June 2003 European Savings Tax Directive to be applied on schedule by Member States as from 1 January 2005.

Value Added Tax (VAT) reduced rates

At the request of France, the Council held a very brief exchange of views on reduced VAT rates and instructed its preparatory bodies to further examine this issue with a view to returning to it at one of its forthcoming meetings. The Council took note of the Commission's intention to present, in the coming days, a non-paper on the question of the relation between VAT base and VAT rates, the proper functioning of the Internal Market, and the principle of subsidiarity.

VAT: two-year extension of reduced rates on labour-intensive services

The Council adopted without discussion a proposal (see IP/03/1693) to allow nine Member States to continue to apply for an additional two years (i.e. until 31 December 2005) the reduced rates of VAT they currently apply to specified labour-intensive services such as renovation of private dwellings, hairdressing, window-cleaning and small repairs.

Directive 1999/85/EC allowed those Member States that so chose (see IP/99/1002) to apply a reduction of VAT on these services for an experimental period from 1 January 2000 to 31 December 2002 (later extended to end 2003), in order to test the impact of such a reduction in terms of job creation and of combating the black economy. In response to requests from the EU's Council of Ministers and the European Parliament, the Commission decided to propose in December 2003 the present further extension for two years because Member States have not so far agreed on the Commission's July 2003 proposal to rationalise and simplify the overall rules for reduced rates of VAT (see above).

Dock dues in the French Overseas Departments

The Council adopted without discussion a Commission proposal of December 2003 to authorise the French Overseas Departments (Guyana, Guadeloupe, Martinique and Reunion) to continue until 1 July 2014 tax exemptions or reductions from "dock dues" taxes for certain locally made products. In accordance with the requirements of the EC Treaty, the proposed measures favouring local produce are only those strictly necessary and proportionate and are justified in the light of the handicap of the remote geographical location of these Departments.