The EU VAT system, like many VAT systems around the world, exempts insurance and financial services.
As opposed to merit goods or services, such as health or education, the rationale for exempting these
services is not to diminish the regressivity of VAT, or to encourage their consumption, but rather to avoid
practical and technical difficulties. Yet, exempting insurance and financial services creates significant legal
difficulties and economic distortions. This paper discusses these, and gives detailed consideration to the
2007 proposals to reform the EU VAT treatment of insurance and financial services. It concludes that the
proposal falls short by not considering full taxation of these services.
Source: Rita de la Feria
Latest Posts in "European Union"
- ECJ Clarifies Pre-2015 VAT Rules for Online App Sales Through EU Marketplaces
- VAT Calculation in Four-Party Supply Chains: Application of Triangular Transaction Rules in the EU
- Dispute Over Royalties and VAT for Unauthorized Public Communication of Protected Music Works in Romania
- EU Proposal: Granting EPPO and OLAF Access to VAT Information to Combat Fraud and Corruption
- Malaga Bids to Host European Union Customs Authority Headquarters Amidst Strong European Competition
