Digital personal services to retain reduced VAT rate

Following the reasoned opinion issued by the European Commission on June 21, 2012, certain services for private individuals, such as home computer and Internet maintenance and home training in digital tools, could see their VAT rates increase to 19.6 and then 20%, instead of the current rates of 5.5 or 7%, depending on the case.

For Gianbeppi Fortis, “in France, home computer maintenance alone represents around a hundred VSEs and SMEs, and almost 10,000 jobs. These companies won’t survive a 13-point increase in VAT! These services are socially useful, helping to reduce the digital divide, assisting vulnerable people to remain in their homes, and ensuring the continuity of social ties, particularly for people looking for work”.

In addition, Gianbeppi Fortis, along with the other organizations representing the personal services sector, stresses that this VAT increase would run the risk of sharply reducing the competitiveness of legal services, to the benefit of undeclared work.

Syntec Numérique deplores the fact that the opinion issued by the European Commission ignores the realities of these professions, which are labor-intensive, cannot be relocated, have low margins and face unfair competition from the informal and illegal economy. First and foremost, it calls on the government to lobby the European authorities to include these services in the definition of services eligible for reduced rates.

Secondly, Syntec Numérique hopes that any compliance with European Union law will be the subject of a dialogue with the various players concerned, and will make it possible to envisage compensatory measures to offset the VAT increase, such as direct aid to beneficiaries, who will be faced with price rises that will reduce their solvency.

In its July 2012 SNP white paper, Syntec Numérique points out that over 80% of users of digital personal services come from the least privileged social and professional categories.