The European Commission has made a proposal to change the VAT Directive 2006/112/EC providing Member States with the flexibility to apply to some services reduced VAT rates on a permanent basis of not less than 5 per cent. As evidence has proven that reduced rates do not create problems for the proper functioning of the Internal Market, the Commission proposes reducing VAT rates for the housing sector, the so-called “labour-intensive” services, and for restaurants and catering services. At the same time, the Commission suggests widening the VAT definition of printed books, so that audio books can also be subject to reduced rates. However, the Commission's proposal will not alter the principle that the application of reduced VAT rates is optional for Member States.