In January 2000, the EU instigated a trial VAT “experiment” allowing a reduced rate of VAT to be charged on certain labour intensive activities. All EU Member States were able to participate in this trial, aimed at stimulating employment in a number of predetermined service industries. The flexibility of the Agreement with the UK made the Isle of Man eligible to participate in the experiment and it elected to introduce a 5% rate of VAT on domestic property repairs where the labour formed a significant part of the supply. The experiment was due to finish after a 3 year period but was subsequently extended, with the experimental rate due to finally finish on 31 December 2010.
REDUCED RATE TO REMAIN
On December 16 2010 it was announced that the rate would be retained on a permanent basis. The full press release may be downloaded below.
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