Some European countries apply what is known as the “parking rate” to certain products and services. But what exactly is the “parking rate?”
On the 1st January 1991, when Directive 92/77/EEC (one of the key directives relating to how VAT is handled in the European Union) was adopted, certain European Union countries were applying reduced, super-reduced or zero rates to goods or services which were not specified by the new regulations as falling within the zero-rate or reduced rate categories. In order to ease the transition from reduced rate to standard rate on these goods and services, countries were permitted to specify a “parking rate” of between 12% and that country’s standard VAT rate to those items. The “parking rate” was intended to be phased out but, to date, this has not happened in all countries.
In a memo from the European Commission dating from July 2003 it was suggested that some effort might be made to phase out the remaining “parking rates” after being in force for 10 years, but to date this has not been followed through.
The following outlines the countries which, as of 1st January 2015, still apply a “parking rate” and what supplies it is applied to:
Belgium (12%)
- Certain energy products such as:
- coal and solid fuel obtained from coal
- lignite and agglomerated lignite (except for jet)
- coke and semi-coke from coal, lignite and peat
- uncharred petroleum coke used as fuel
- Certain tyres and inner tubes.
Ireland (13.5%)
- Energy for heating and light
- Movable property used in the construction and maintenance of immovable property
- Supply of immoveable property
- Services consisting of the routine cleaning of immoveable property
- Repair and maintenance of movable property
- Services relating to the care of the human body
- Certain specific tourist services
- Services relating to photography
- Services supplied by jockeys
- Works of art and antiques
- Short-term hire (less than 5 weeks) of:
- motor vehicles designed for the conveyance of persons by road
- ships, boats and other vessels not exceeding 15 tonnes gross designed for the conveyance of passengers
- sports and pleasure craft, including yachts, cabin cruisers, dinghies, canoes, skiffs and racing boats
- caravans, mobile homes, tents and trailer tents
- Driving schools
- Professional services supplied by veterinary surgeons
Luxembourg (14%)
- Certain wines
- Solid mineral fuels, mineral oils and wood intended for use as fuel, with the exception of wood for heating
- Washing and cleaning products
- Printed advertising matter, commercial and similar catalogues; tourism publications
- Heat, air conditioning and steam, with the exception of heat provided by heating networks
- Safe custody and administration of securities
- Administration of credit and credit guarantees by a person or organisation other than that granting the credit
Austria (12%)
- Wine from farm production carried out by the producing farmer
Portugal (13%)
- Wine
- Agricultural tools and utensils, mobile silos, tractors, pumps and other machinery designed exclusively or mainly for the purpose of agriculture, cattle breeding or forestry
- Diesel for use in agriculture