As set out in its July Action Plan (see EUROPE 12528/2), the European Commission intends to present a legislative package at the end of 2021 to change the value added tax (VAT) rules with regard to the treatment of financial and insurance services, according to a roadmap published on Thursday 22 October.
In the Commission’s view, the rules need to be revised as they date from 1977 and have become largely obsolete. It is also a question of dealing with the implications of the 2017 rulings of the Court of Justice, which ruled that financial services and insurance were not covered by the VAT exemption granted to autonomous groups of persons, thus adopting a restrictive approach to the VAT Directive (see EUROPE 11867/26).
The Commission also considers that the current rules are considered complex and difficult to apply in practice, in particular because they have not kept pace with the development of new services in the financial sector, such as financial technology services or cryptocurrency services.
The Commission had already proposed to review these rules in 2007, but discussions in the EU Council led to a deadlock, and the proposals were withdrawn in 2016.
See the roadmap: https://bit.ly/3jpzNHY (Original version in French by Marion Fontana)