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%.
