Insurance Europe: Current VAT rules are outdated for the provision of modern financial services

25 November 2020 — Cosmin CONCEATU
Insurance Europe published its response to the European Commission's (EC's) roadmap for the review of VAT rules for financial and insurance services. Insurance Europe considers that the current VAT rules are outdated and cannot be adequately applied to the provision of modern financial services.

While welcoming the EC's plans to tackle the lack of VAT neutrality, legal uncertainty and regulatory complexity, Insurance Europe emphasized the need to go further and ensure that VAT rules are adapted to reflect the realities of the modern business environment.

According to Insurance Europe, another major issue is the lack of harmonisation in how VAT rules are implemented across member states, this fragmentation in the internal market being a significant barrier to the Capital Markets Union.

The resulting uneven playing field also has an adverse effect on competition and leads to the inappropriate taxation of financial services providers, lost VAT income for EU member states, and a considerable cost for businesses, which is largely passed on to customers, Insurance Europe stressed.


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