EU to reform financial services VAT regime

EU to reform financial services VAT regime

Proposed changes will reduce uncertainty and remove inconsistency in VAT

The financial service sector has welcomed an announcement by Brussels to
update the VAT regime for the industry

Problems have arisen as financial services and insurers have been exempt from
VAT. They are not required to charge VAT when providing services, but have to
pay VAT on goods and services acquired for business, which leads to mismatches
and places the institutions at a disadvantage to foreign competition.

The EC yesterday proposed that it would focus on redefining what services are
exempt from VAT, providing the sector the option of taxing services and an
industry-specific VAT exemption on cost-sharing arrangements.

‘The changes will increase clarity, allowing firms to operate and plan more
efficiently. This is especially true of firms with cross border operations who
will be able to pool operations and share costs between group members without
creating additional non-recoverable VAT,’ said Sarah Knight, assistant director
of financial regulation and taxation at the Association of British Insurers.

Further reading:

Read
the full statement from Brussels

Multi-million pound VAT victory for
funds

Related Articles

Minimising taxable profits - the way forward for SMEs to reduce corporate tax bills

Corporate Tax Minimising taxable profits - the way forward for SMEs to reduce corporate tax bills

2w Chrissy Chiu
R&D tax relief claims are rising, HMRC report reveals

Corporate Tax R&D tax relief claims are rising, HMRC report reveals

2m Emanuela Hawker, Reporter
Appropriate tax systems – taxation in the ‘Fourth Industrial Revolution’

Corporate Tax Appropriate tax systems – taxation in the ‘Fourth Industrial Revolution’

3m Jane Mackay, Crowe
Watch out when winding up

Corporate Tax Watch out when winding up

8m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

8m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

10m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

11m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

11m Alia Shoaib, Reporter