Review of VAT rules for FSI – EU consultation

The VAT rules for financial and insurance services, in particular, the exemptions in article 135 of Directive 2006/112, are criticised for being complex, difficult to apply and for not having kept pace with the developments of new services in the sector.

The European Commission had already proposed to review the rules on the VAT treatment of insurance and financial services in 2007. However, the failure to achieve agreement at Council level led to the withdrawal of the proposed legislation in 2016.

In the Communication on an Action Plan for fair and simple taxation supporting the recovery strategy (see MIT News 16 July 2020), the Commission announced that it will review the VAT rules for the financial and insurance services. This initiative aims to tackle the lack of neutrality and the legal uncertainty and regulatory complexity of the current system.

As part of this initiative the Commission has invited stakeholders to submit feedback on the VAT rules for financial services and insurance, which feedback will be taken into account when developing this initiative.

The deadline for submission of feedback is 19 November 2020.

 

source: ec.europa.eu

 

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