samedi 30 novembre 2013

HORSE WORLD IN FRANCE THREATENED BY VAT MEASURES


















The VAT raise will destroy 6000
 employment positions and 2000 equine structures
and send 80000 to slaughterhouses!

The French government has just decided to raise from
7% to 20% the VAT applied to riding classes and boarding
fees. For riders as for equestrian centers, the decision is very badly received.
Extremely badly…



In December 2012, only a year ago, the subject was already at the heart of every concern. At the time, the the prospect of an increase of the VAT rate had nearly been dropped. But it has been brought back and this time the Damocles sword (threat) hung above the equestrian facilities has fallen. (cf below)
On November 13th 2013 the government has passed a law stipulating a raise from 7% to 20% of the VAT rate starting January 2014. Stephane le Fol, Minister of Agriculture, justifies this choice explaining France had pleaded the maintain a reduced rate faced with the European Commission, yet to no avail. Therefore is obliged to apply the full rate as soon as 2014, or it would risk a new condemnation by the European Court of Justice, this time for failure over failure. A condemnation synonym with for the State of a heavy fine (several ten of millions of Euros) and of an obligation of $250000 per day of failure.

Disastrous consequences

As an attempt to counteract this VAT raise, the horse world, so often divided, has this time gathered solidly to mobilize and heavily protest against the decision. For the industry, the challenge is huge as this measure will definitely raise all the fees and damage many structures and even endanger the whole development of horse riding. According to the Groupement Hippique National, which gathers and defends all the French equestrian centers, the Horse National Federation and the FNSEA ( other horse federation), the VAT raise will destroy 6000 employment positions and 2000 enterprises and send 800000 horses to slaughterhouses.  That’s the last straw and aberration for activities which couldn’t be more local, which can’t be delocalized and are in no way a hampering factor to the European market functioning. “Raise the VAT to 20 % puts the equestrian facilities to a double burden, the president of the FFE (French Federation of Horse riding), as they already have to face with the impact of the economy crisis. Last year, we have registered a decrease of 2% in the number of registered licensed riders, this year, it should be of 6%. Without counting the areas where schools have already applied the organization of scholar rhythms, the activity has decreased of 15% in average. An equestrian center has an annual turnover of 130 000EURO of which only 10% remains for the head owner. This is the reality the equestrian centers’ owners live on an monthly salary of 1000 to 1500 EURO per month.”

In order to minimize, at least temporarily the impact of this raise, the minister of the economy, Pierre Moscovisci, has announced a few measures to back up the facilities. Thus, the contracts agreed on before December 2013 will continue to benefit from the reduced tax rate until their expiration and at the latest December 2014. A special help, via a Horse stock managed by the president of the equine field, but of which we don’t know anything for now, should be granted to the equestrian facilities. The government explains that it “will defend the possibility to apply a reduced tax rate to equestrian activities within the reviewing of the VAT , with the will to obtain results in 2014”.
Serge Lecomte, president of the FFE deplores this raise, which “goes against the survival of many equestrian centers and heavily jeopardizes the entire welfare of the horse industry”, immediately called up all the structures to mobilize themselves. Early November, many riders and equestrian centers had already monopolized the social networks and demonstrated in the street in Amiens, Argenton sur Creuse, Paris, Montpellier, to express their discontent and fears . Other actions have been programmed and the protest should grow. For now, this engaged fight hasn’t managed to make the government bent. For the time being , only?

VAT : history of a struggle France – Europe

January 1st 2005 : the French State having acknowledged the agriculture scope of the equestrian activities, decides to grant a low VAT rate.

December 16th 2010 : The European Commission engages a procedure against France because of this reduction, which according to them should only apply to horses meant for meat consumption.

March 8th 2012 : The European Justice Court condemns France to apply this reduced tax rate.

June 22nd, 2012 : Following that condemnation, the European Commission asks the French government to apply a full rate to horses sales and to horse riding classes.

January 1st 2013 : the French state decides to apply a VAT of 19,6% on horses sales, but maintain a reduce rate of 7% on horse riding teaching , on boarding fees , claiming they are physical activities and a sport, and as such should only be taxed lightly.

November 13th 2013 : reviewing its latest appreciation, the government publishes a decree abrogating the reduced tax rate over the equestrian activities which allowed the rate to transfer from 7% to 20%.
Non à la TVA