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Article summary

The European Commission has opened its consultation on its plans to reform the VAT rules for financial and insurance services, following the closure of the roadmap feedback period in November 2020. The Commission states that the current rules are criticised for being complex, difficult to apply and for not having kept pace with the developments of new services in the sector, which has led to a lack of VAT neutrality, legal uncertainty and high administrative and regulatory costs. The consultation seeks to obtain the views of stakeholders on the functioning of the current VAT rules as well as on possible changes to these rules. The answers provided will feed into the review of the relevant provisions of Council Directive 2006/112/EC (the VAT Directive) and will contribute to a possible future legislative proposal. The consultation closes on 3 May 2021.