EU executive proposes VAT change for finance firms
Published November 28th, 2007
Mortgage lenders and banks could save millions of euros under plans unveiled by the European Commission on Wednesday to give them sales tax refunds and help trim the cost of financial products for consumers.
EU Tax Commissioner Laszlo Kovacs, however, has already cautioned that the proposal to iron out inequalities in the value-added tax (VAT) system may face a long struggle to obtain unanimity among the bloc’s 27 member states and become law.
EU VAT legislation exempts financial service firms and insurers from charging VAT on their offerings, but they must pay the tax on any products or services they themselves buy.
The Commission launched a review in 2005 and the outcome is the package launched by Kovacs on Wednesday to scrap the VAT exemption for financial services and clarify which services will fall under the scope of the revision
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