The Official Journal of the European Union published on 10 December 2010 Council Directive 2010/88/EU of 7 December 2010 amending Directive 2006/112/EC on the common system of value added tax, with regard to the duration of the obligation to respect a minimum standard rate. According to this Directive minimum standard will maintained in 15% for the next five years.

According to Council Directive 2010/88/EU regarding the common system for the application of value added tax (VAT), the period for the application of the common standard rate will be extended from January 2011 until December 2015, keeping the rate at the previous minimum level set in 15%.

Pending the outcome of consultations on a new VAT strategy which is expected to address future arrangements and corresponding levels of harmonisation, it would be premature to set a permanent standard rate level or to consider changing the minimum rate level. For that reason, the Council has decided an extender period for the application of a minimum rate for a further period long enough to ensure legal certainty, but without precluding a further revision of VAT legislation before 31 December 2015 to address the outcome of the new VAT strategy.

Seting minimum standard rates in the field of indirect taxes is a common practice which is necesary in this case in order to prevent a growing divergence in the standard rates of VAT applied by the Member States from leading to structural imbalances in the European Union and distortions of competition in some sectors of activity. In February 2009, given the general economic situation, the Union supported maintaining general minimum VAT standard rate at 15% while supporting reduced rates for some products an economic sectors.

This decision taken by the Council is based in the fact that the standard rate of value added tax currently in force in various Member States, combined with the mechanism of the transitional system has ensured that this system has functioned to an acceptable degree. With new rules on the place of supply of services which favour taxation at the place of consumption, the possibilities for exploiting differences in VAT rates through relocation have been limited further and potential distortions of competition reduced.