A coherent tax framework for the EU’s financial sector

1.7.2026 A10-0169/3

Amendment 3

Matthias Ecke, rapporteur

Report A10-0169/2026

Matthias Ecke

A coherent tax framework for the EU’s financial sector

(2024/2117(INI))

Motion for a resolution

Paragraph 27

Motion for a resolution

Amendment

27. Calls on the Commission to review the impacts of the current VAT regime on the financial sector and to publicly share this analysis; calls on the Commission to consider policy options to address identified distortive impacts, like more effective VAT grouping and options for reforming the VAT exemption, with a view to bringing forward a proposal to reform the VAT rules for the financial sector; emphasises that any such reform should reduce irrecoverable VAT and the fragmented application of rules, improve legal certainty and tax fairness, and strengthen the competitiveness of EU financial markets, while safeguarding financial stability and minimising regulatory arbitrage between Member States; emphasises that any such reform must also safeguard consumers and continue to ensure that the financial sector makes a fair contribution to public revenues;

27. Welcomes the comprehensive study published by the Commission in June 2026 on the taxation of the financial sector1a; highlights the conclusions of the study, which confirm that due to the VAT exemption, providers of financial services do not have the right to deduction, which in turn means that many of the sector’s input purchases are subject to VAT, resulting in a tax burden that does not appear on invoices and therefore is commonly referred to as ‘hidden’ VAT; stresses that, according to the study, the original technical rationale for the VAT exemption no longer remains fully valid, and that, combined with divergent national sectoral taxes, the current tax framework creates high compliance burdens, distortions, complexity, legal uncertainty and fragmentation; further highlights that, according to the study, the current framework is not aligned with broader EU policy priorities such as the savings and investment union strategy, and that the most effective way to address the root causes would be a more fundamental reform of the VAT exemption and its interaction with sectoral taxes; calls on the Commission to consider policy options to address identified distortive impacts, like more effective VAT grouping and options for reforming the VAT exemption, with a view to bringing forward a proposal to reform the VAT rules for the financial sector; emphasises that any such reform should reduce irrecoverable VAT and the fragmented application of rules, improve legal certainty and tax fairness, and strengthen the competitiveness of EU financial markets, while safeguarding financial stability and minimising regulatory arbitrage between Member States; emphasises that any such reform must also safeguard consumers and continue to ensure that the financial sector makes a fair contribution to public revenues;

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1a European Commission, ‘Taxation of the Financial Sector’, June 2026.

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