2024-03-27 09:00:10
The Court of Auditors recommends the abolition of VAT at a reduced rate of 10% for certain personal services, such as educational support or “small DIY”, in a report published on Wednesday.
Provided at home, personal services (housekeeping, childcare, small gardening, assistance to the elderly and disabled, educational support, etc.) are subject either to the normal VAT rate (20%), or to reduced rates. 5.5% and 10%.
The coexistence of these three rates “is difficult to read and complicates controls, particularly when a service provider provides activities subject to different rates within the same contract”, considers the Court of Auditors in its report on the support of the State for human services.
The scope of the 5.5% rate, which concerns “services exclusively linked to the essential actions of daily life for disabled people and dependent elderly people who are unable to perform them”, is ” coherent and well-defined.
On the other hand, “the distinction between the intermediate rate of 10% and the normal rate of 20% is based on criteria that are, if not arbitrary, at least not explained,” adds the court.
The eligibility of “certain activities (for example small DIY, academic support, administrative assistance)” appears in particular “questionable”, according to them.
Faced with this observation, the institution recommends putting an end to VAT reduced to 10% and subjecting all activities to the normal rate of 20%, “with the exception of those which relate to social needs, subject to the rate of 5.5%.”
In addition to the autonomy of elderly, disabled or dependent people, already subject to this reduced rate, “childcare might also benefit,” adds the Court of Auditors.
The impact of this overhaul on vulnerable groups “would be offset” by two factors, specifies the institution: “the mechanical increase in social benefits, the conditions of granting of which might be revised accordingly”, and “the increase of the tax credit, the basis of which is the remainder payable.
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