The European Parliament’s ECON committee has released a draft report urging the removal of the long‑standing VAT exemption for financial and insurance services under Directive 2006/112/EC. The report highlights the distortions caused by the exemption, the proliferation of over 90 sector‑specific taxes across the EU, and calls for a coordinated framework that taxes identifiable fees, clarifies emerging services, and harmonises cost‑sharing mechanisms.
Financial services are exempt from VAT under Council Directive 2006/112/EC.
The exemption creates irrecoverable VAT, preventing institutions from deducting input VAT and embedding hidden costs into pricing.
ECON calls for reform to tax identifiable fees and commissions, clarify the treatment of emerging services, and harmonise VAT grouping and cost‑sharing mechanisms.
More than 90 sector‑specific taxes now apply across the EU.
The Commission withdrew its Financial Transaction Tax proposal.
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e-Invoice.app · 2 days ago
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Bloomberg Tax · 2 days ago
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VATCalc · 5 days ago
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European Parliament · 8 days ago
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e-Invoice.app · 8 days ago
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Bloomberg Tax · 8 days ago
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