Under the approved amendment, EU countries — which before the temporary exemption were able to adjust the rate of VAT for vaccines — now also have the option to charge a reduced VAT rate for testing kits and closely related services. The Council of the European Union consists of representatives of the 27 member states.
EU countries can charge a zero or reduced rate of VAT on face masks and other personal protective equipment as well as coronavirus vaccines under new pandemic relief measures. The EU suspended the collection of import VAT on items such as PPE, testing kits, ventilators and key medicines beginning in May. The exemption was set to expire Nov. 1 but will now run until April.
Under EU VAT rules, a country isn't generally allowed to reduce the rate to zero for an item that has previously been subject to the tax. However, as a disaster relief measure, an exemption was made for the bloc's member countries and the U.K. to ensure that medical equipment and protective gear could easily get to where it was needed.
The U.K., despite having left the bloc, is still subject to its VAT rules under a transition period due to expire Dec. 31.
The council did not immediately respond to a request for additional comment.
--Editing by Neil Cohen.
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