The government is to address to the European Commission an initiative for an extension of the reduced VAT rate on construction, renovation and maintenance work for residential housing, the Finance Ministry confirmed on Wednesday.
Slovenia hopes to have extended the transitional period that it obtained for VAT on housing as part of its EU accession negotiations, which is scheduled to end this year.
In case the initiative fails, new dwellings would have to be sold in 2008 at a VAT rate of 20% and no longer at the reduced rate of 8.5%. In line with the relevant EU directive the reduced rate can only be used for housing provided as part of a social policy.
Like in other EU members, the renovation, repairs and maintenance of residential housing will meanwhile continue to be subject to a reduced VAT rate, this being the result of an agreement reached by all EU member states after prolonged negotiations in 2006.
Slovenia requires the consent of all EU member states to be approved an extension in its transitional period.
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