VAT: Call for input on the forthcoming review of Community Legislation on the VAT treatment of financial services
The European Commission launched an online consultation for views from the public and business on reforming Community legislation on VAT and Financial Services.
The consultation was based on a paper (see below) which seeked views on the current legal framework as set out in the Sixth VAT Directive (Directive 77/388/EEC), and options for change. It explains why there is a need to review Community legislation in this area. In particular, it looks at why there is a need to ensure that it reflects the world as it is today, taking account of the changes that have occurred in the intervening 30 years.
This paper is of interest to stakeholders in the financial services industry, including insurance, their professional advisors and indeed to consumers of these services generally.
The purpose of consulting the public on this issue was to provide input to the discussion, gather relevant feedback and assist Commission services in developing their thinking on the subject.
The consultation was based on the document 'Consultation Paper on modernising Value Added Tax obligations for financial services and insurance '. This document does not necessarily reflect the views of the Commission nor does it mean that the Commission is committed to any official initiative in this area.
Comments were invited on this paper by 9 June 2006 at the latest.
Submissions had to be made in writing to
Directorate-General Taxation and Customs Union
VAT and other turnover taxes unit
or by e-mail to firstname.lastname@example.org
or by fax to +32-2-299-36-48
A report summarising the outcome of the consultation has been published on this website.
As part of this consultation the Commission in conjunction with European Banking Federation held a one day conference on the modernisation of VAT on financial services (see IP/06/602). This took place in Brussels on Thursday 11th May and brought together representatives from the public sector and the business community (banking, insurance, fund and asset management and outsourced service providers).
The full programme including speeches and presentations can be found here.
Commission publishes working papers
Within the European Commission the Taxation and Customs Union Directorate-General ( VAT department) is currently preparing draft legislation on the exemption of insurance and financial services from Value Added Tax (VAT). In 2007 this is one of the most important legislative initiatives of our Directorate-General (DG). It focuses on modernising the definitions of exempt insurance and financial services with inter alia the objective of creating more legal certainty for economic operators and Member States' fiscal authorities. The initiative also provides for cross-border instruments enabling economic operators of that industry sector to benefit more from the Single European Market.
In the preparatory phase of preparing legislation following the public consultation as well as during the discussion of concrete options for legislation, the Taxation and Customs Union DG has maintained a transparent approach informing stakeholders on the content of the work in progress. For maintaining that transparency, our DG now publishes - further to and replacing the publication of 18 June 2007 - a last set of working papers covering all exempt services as well as possible provisions for the creation of VAT neutral cross-border vehicles.
As work continues, these working documents will only temporarily remain on this website. Given the advanced stage of the work, no further publication is to follow before the official proposals. Potential comments can be sent to TAXUD-D1@ec.europa.eu.