The services referred to in Article 106 must meet the following conditions:
(a)
they must be labour-intensive;
(b)
they must largely be provided direct to final consumers;
(c)
they must be mainly local and not likely to cause distortion of competition.
There must also be a close link between the decrease in prices resulting from the rate reduction and the foreseeable increase in demand and employment. Application of a reduced rate must not prejudice the smooth functioning of the internal market.