Promoting employment in the service sector

A political agreement on the list of labour-intensive services that could qualify for a reduced rate of VAT has been agreed at the informal meeting of EU Finance Ministers in Turku, Finland, from September 10 to 11, 1999. The Ministers agreed to the list of labour-intensive services eligible for reduced VAT rates with the objective of promoting employment in the service sector. Member States will be able to apply the experiment to services in two categories out of a list of five: - small repair services, renovation and repairing of private dwellings; - window cleaning and cleaning in private households; - domestic care services; and - hairdressing. The French Finance Minister, said that from January 15, 2000, France would reduce VAT from 20.6% to 5.6%, for building work in private dwellings and for home help.