- The European Parliament calls for reform of the EU’s fragmented and outdated tax framework for the financial sector, especially regarding VAT exemptions.
- The current VAT exemption for financial services, dating from 1977, is seen as obsolete and creates hidden tax burdens, market distortions, and disadvantages for fintech and digital providers.
- Parliament urges the European Commission to propose modernized VAT rules for financial services, particularly for clearly identifiable fees and commissions.
- The lack of a coordinated EU approach has led to 91 different sector-specific taxes across Member States, causing fragmentation, legal uncertainty, and higher compliance costs.
- The report frames tax reform as essential for EU competitiveness, linking it to the completion of the Banking Union and the Savings and Investments Union.
Source: globalvatcompliance.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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