- The European Commission published a study on reforming outdated VAT exemption rules for financial services.
- The current rules are fragmented, create tax distortions, and prevent financial firms from deducting input VAT.
- On July 7, 2026, the European Parliament urged the Commission to consider reforms that reflect digital innovations like crypto, DeFi, and fintech.
- Possible reforms include modernizing and simplifying definition and deduction rules, expanding VAT grouping, or making more fundamental changes.
- More radical options include abolishing the exemption entirely or replacing it with a Financial Activities Tax (FAT).
Source: pwc.nl
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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