- ECON’s February 2026 draft report urges a review of EU financial sector taxation and says the 1977 VAT exemption for financial services is outdated.
- It argues that fintech and technological change have made the current rules ineffective, creating irrecoverable VAT costs for institutions.
- The report says the exemption raises compliance costs and fragments the single market through 91 different sector-specific taxes across Member States.
- It calls on the European Commission to modernize VAT rules, especially for identifiable financial charges such as fees and commissions, to reduce distortions and ensure fair contribution.
Source: vatcalc.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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