Brussels, 25/09/2008 (Agence Europe) - On Thursday 25 September, the European Parliament adopted the consultative report by Joseph Muscat (PES, Malta) on the legislative proposal aimed at ensuring more uniform application of tax exemption on value added tax (VAT) applicable to financial services and insurance, without amending the text put forward by its committee on economic and monetary affairs.
MEPs support the overall objective of the legislative proposal that the Commission presented in November 2007. They add to the list of services exempted from VAT operations on derived financial instruments and specify the notion of placement funds in order to come up with a more accepted definition to match that reached by those in the sector. The legislative proposal also gives an economic operator the choice to decide, as of 1 January 2012, whether it wishes to be fully subject to VAT. Once it uses this right, a company may deduct the VAT paid upstream on its investments. MEPs support the introduction of this option but call on member states to grant it on a case by case basis. They also require a report on implementation of the right of option three years after entry into force of the new rules, the report being accompanied by a legislative proposal of the Commission specifying the arrangements for exercising the right of option. Finally, MEPs support the setting in place of cost-sharing mechanisms by economic operators that have come together in a group to invest in common (e.g. acquisition of IT or the use of an expert's services). They consider that companies registered outside the EU should also be authorised to take part in these groupings of taxpayers. Such groupings should be able to provide service to third parties. (M.B./transl.jl)