Reduced VAT rates for hospitality - HOTREC position paper

UPDATED 14 October 2020: the HOTREC position paper is now publicly available. We are glad that FoodDrinkEurope and FoodServiceEurope have brougt their support and co-signed the position paper with us.

The final version to be publicly dissemniated by HOTREC is available here:

Background

The establishment of reduced VAT rates is first and foremost an issue for national governments, but the EU VAT Directive of 2006 sets a lower threshold of 5% for reduced VAT rates and only allows EU Member State to have one or two reduced VAT rates.

So beyond asking for a message of support for reduced VAT rates from Europe to national governments, HOTREC is asking for temporary flexibility with regard to the existing EU VAT framework so that, if possible, EU Member States could set a reduced VAT rate of 5% for hospitality services without there being a potential clash with EU law (because of the limited number of reduced VAT rates an EU Member State can set).

HOTREC has approved a position paper requesting support from the EU for temporary reduced VAT rates in the hospitality sector in order to mitigate the impact of the COVID-19 crisis. The position paper highlights why reduced VAT rates are beneficial for our sector and an essential and highly effective measure of support in these times.  

Please feel free to use or take inspiration from this position paper for lobbying activties at national level. Please note however that HOTREC will seek broader support from like-minded stakeholders (trade unions, tourism sector industry associations, etc.) to create if possible a coalition on this policy request before actively disseminating the position paper to EU policy makers.