European Commissioner for Taxation, Algirdas Semeta

The European Commissioner for Taxation, Algirdas Semeta, a Lithuanian economist, has asked the Spanish government on behalf of the EU to explain why they have not offered tax exemption to childcare services provided outside school hours, despite the fact that the laws of the European Union allow for the savings to be implemented.

Since November of last year, dining and extracurricular activities have had 21% IVA added for students over six years of age, and a 10% tax for those under 6, which MEP´s argue is contrary to EU law, and it “undermines the work of the social sector entities engaged in the provision of services directly related to education of children and youth”, adding it also eases a “stiff tax burden on families”.

The Commissioner of Taxation has pointed out that VAT exemptions for social assistance and social security, education and the protection of children and youth should be interpreted “strictly, though not as strict as to annul the desired effect thereof”.

Semeta notes that the Court of Justice of the EU, “seems to accept that child care services, including care for preschoolers and school-age children outside school hours, may be considered the provision of a service that falls within the scope of social assistance and social security and the protection of children and young people”, which would render them exempt.

“The Commission intends to contact the Spanish authorities for information on the application of these exemptions in relation to the services mentioned in the question in that Member State,” says the Commissioner for Taxation.

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