Did everyone except me know that the concessionary rate of VAT charged at 5.5% on all building trade work on houses over two years old will leap to 19.0% as of 1st January 2006???
I have just found out, from a tiny comment in Sunday Times, yet a French information website for the building trade tells me it was only ever a short term measure that has been extended twice already. Apparently EU rules say it is unfair subsidy!
A real bummer if you had work planned but just hadn't got round to it
I think it has not yet changed, and every year the same argument takes place. From the below, which is the only reference I managed to find after searching far and wide. Looks like the meeting takes place today, so keep your fingers crossed. I doubt that Chirac will agree to annoy loads of voters at this stage, if he can help it:
Marcus,
I thought that Chirac and the had nothing to do with the decision now, he has always been in favour. The problem is that it's in the hands of the EU, as is the proposed levy of 5.5% TVA on restaurants by the French government. They think it is unfair to allow this reduced rate. Fingers crossed that it is a favourable decision for the building trade (and the restaurants) today!
I'm sure you're right but I imagine there is a lot of lobbying and wrangling and bargaining going on first before agreement is reached. Can't say I'm an expert (or even slightly knowledgeable) about how these things work, though.
All the same, I'm pleased our building works are more or less finished for the time being. It would have been a very large extra expense for us if VAT had been 19.6% when the work was done.
My personal bet is there is no chance of the rate increasing this year or next but of course I'm probably wrong...
Is it any wonder that the "black" economy continues to thrive?
You repair your property, you improve your property, you restore your property - and the government charges you nearly 20% for the pleasure of doing so. What do you get in return? Nothing!
I thought the VAT levied at 5.5% had significantly reduced the black market builders/maçons, plumbers etc. If the rate does go up I will have to rethink the landscaping I have booked for February 2006! But I'm with Marcus, I'd bet on no change for the 5.5%.
My builder has just told me that the final appeal on the subject is today. Thankfully I only have an external terrace to tile - the rest of my work is done.
BRUSSELS (AFX) - EU finance ministers have failed to reach agreement on reduced value-added tax levels and have decided to postpone the talks until the European summit on Dec 15-16
Could this be another delay coming, for another low tax year ahead!
Hope so roof and extension planned for Jan '06
Susan wrote:I thought the VAT levied at 5.5% had significantly reduced the black market builders/maçons, plumbers etc. If the rate does go up I will have to rethink the landscaping I have booked for February 2006! But I'm with Marcus, I'd bet on no change for the 5.5%.
Yes, you may be right but the "black" is also about the income tax they don't pay and the social security they don't pay and the insurance they don't pay. Stick another 19.6% on top of that and it all adds to a big incentive.
How about a barter system? Three goats in return for some landscaping? Would the tax man accept 19.6% of three goats by way of payment? As an alternative would he allow you to donate 19.6% of three goats to a poor family in Angola? Somehow I suspect he just wants your money, come what may.
well all the tradesmen round here are convinced it will remain 5.5% - I think if it does go up it will be another nail in the coffin for the government - everyone is so depressed with all the prices increasing all the time. Also for tradesmen it would be a huge hic cup for businesses.
When we arrived in France 5 years ago a cooked chicken was under 3 Euros (we were still in Francs then) the price is now 6.99 Euros even 7.25 ! Now that is what I call inflation!
Well, it looks like we will have to wait until the 24th January 2006 for an answer on the TVA at 5.5% for renovation and restauration! Germany are still blocking the proposal and because of the other lengthy EU negotiations yesterday the decision on TVA has been postponed yet again.
Oh dear - it isn't good news. Poland, Cyprus and the Czech Republic have not approved the plans for France to keep the TVA at 5.5%. Unless they can be persuaded to change their minds, the rate will go up to 19.6% from Monday 30th January. Apparently they were forced to cut out conciliatary VAT rates themselves in order to join the EU.
Maybe the French government can work out a few backhanders to get their agreement, after all, this is one of their strong points..isn't it?
