Ref. Ares(2019)3442040 - 27/05/2019
- Finally, they handed to the Commission representatives a document entitled 'Request
for a review of the matter of VAT applied to goods supplied for new construction of
religious buildings'. The document recommends raising the issue with the VAT Expert
Group and the VAT Committee with a view to producing guidelines that recommend
a 5% rate on goods and services supplied for the construction of religious buildings.
- The Commission explained that, although Member States are bound by the EU VAT
legislation, they remain sovereign as regards setting their VAT rates. It made clear
that the role of the Commission does not involve any kind of influence over Member
States' decisions in this regard.
- Moreover, the Commission clarified that the exemptions provided for in
Article 132(1)(g), (k) and (l) of the VAT Directive address the output VAT and not
the input VAT side and therefore they cannot be applied to the case in question. It is
only business that may deduct the input VAT and not final consumers such as the
- The Commission also stated that the reduced rates may be applied only to supplies of
goods and services referred to in Annex III of the VAT Directive. And emphasised
that even for goods and services contained therein, Member States are not obliged but
simply enabled to apply a reduced rate.
- The Commission added that the 2008 Proposal to amend the VAT Directive had
suggested including inter alia
"places of worship" to point 10a of Annex III but this
was rejected by the Member States at Council level.
- Furthermore, the Commission referred to the Action Plan and the forthcoming
Proposal on VAT rates reform, which envisages granting more flexibility to Member
States in setting VAT rates. It invited the Church to participate in the ongoing open
public consultation which will feed into the proposal.
- Last, the Commission clarified that the VAT Committee only deals with existing law
and thus is not competent to address the issue in question. It suggested that the Church
tries to raise awareness of their issues at Member State level in view of the Council
discussions of the Proposal on VAT rates reform.
16 February 2017