On Wednesday 18 April, the European Banking Federation wrote to Stephen Quest, Director General for Taxation and Customs Union at the European Commission, to ask the institution to present a proposed change to the VAT directive, following a number of recent decisions of the Court of Justice of the European Union (CJEU) that has had serious fallout for European banks.
The source of these concerns lies in the three judgements returned by the CJEU on 21 September of last year (see EUROPE 11867), in which the Court introduces the notion of “general interest” to exclude groups whose members operate an economic activity in the banking, insurance or finance sectors from the VAT exemption permitted under Directive 2006/112.
Many European financial institutions have organised the provision of services, including the outsourcing of staff, using this independent group of persons regime - which is often seen as a way of legally circumventing VAT liability - the organisation reiterates, adding: “in many cases, restructuring will not be possible or feasible”.
“This problem currently faced by banks is particularly damaging since the digitalisation of the economy requires all companies to adopt more reactive and mobile structures”, it explains.
On 18 January, the Commission presented a limited revision of the directive (see EUROPE 11942), but this makes no reference to the case-law of the Court. (Original version in French by Marion Fontana)