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BRUSSELS, Belgium – Are bicycles, bike products and repairs becoming cheaper in 2011? Despite rising costs for raw materials and parts the bike industry can probably look forward to a considerable reduction of retail prices. This is the result of a proposal on VAT rates by EU Taxation Commissioner Lászlό Kovács. The European Union strongly believes that the environmentally friendliness of services and products is a very important argument in favour of reduced rates.

In his current proposal, the EU Taxation Commissioner includes goods and services for the construction industry as well as labour intensive services like cleaning, beauty parlours, gardening and products for personal care.

Reduced VAT rate for all bicycle products

The European bicycle industry organizations, COLIBI, COLIPED, ECF and ETRA have sent a joint letter to the EU Taxation Commissioner in which they plea in favour of a reduced VAT rate for all bicycle products and services as well. The rising use of bicycles is environmental friendly and a reduced rate would suit very well in other European policies and objectives.

The bicycle can contribute effectively to the realisation of goals in several areas, such as (non-exhaustive list): environment (air & noise pollution), energy saving and energy efficiency, public health & safety, mobility (especially in urban areas) & safety, liveability of towns and cities, social inclusion, economy, urban and regional development and growth, tourism and culture.

The standard VAT rate within the EU is minimal 15% and maximum 25%. The reduced VAT rate is minimal 5%. Within this range each member state can set its own VAT rates.