Brussels, 21/06/2011 (Agence Europe) - On the subject of taxation, the Ecofin Council on Monday 20 June, noted a progress report which took stock of progress made and problems still to be resolved regarding VAT application to insurance services and other financial services. The proposals for a directive and regulation presented on this subject in 2007 aim to update the definition of services exempted from VAT. The Commission also proposed a mechanism to establish cross-border cost-sharing groups, and extension of the option for service providers to apply normal VAT rules. The Hungarian Presidency noted four outstanding points at this stage, as follows: (1) the cessation of insurance and reinsurance contract portfolio; (2) sub-contracting; (3) investment fund management; and (4) derivatives. The Ecofin Council also set out conclusions concerning the code of conduct on harmful tax competition with regard to corporate tax. Ministers call on the ad hoc working group to continue to monitor the freeze and dismantling of provisions in question and to continue work on this. The Commission is to continue discussion with third countries and keep the working group regularly informed of progress made. The latter must present a new report at the end of the year. The Council also adopted a decision authorising Romania to designate the persons to whom supplies of certain cereals and oilseeds are made as liable to value-added tax, by derogation from Article 193 of Directive 2006/112/EC. The derogation will be valid for two years and will allow Romania to prevent tax evasion whilst introducing definitive measures to prevent tax evasion in the future. Romania will not seek renewal of the authorisation. Lastly, the Council adopted a decision authorising Sweden to apply a reduced rate of electricity tax to electricity provided to vessels at berth in port, in order to promote an environmentally less-harmful way for ships to meet their electricity needs. (F.G./transl.jl)