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Adopted text

A coherent tax framework for the EU’s financial sector

TA-10-2026-0248 · P10_TA(2026)0248 · PE779.360

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✦ In short · AI summary of this text, generated 4 Sept 2026

Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

The European Parliament adopted a resolution on a coherent tax framework for the EU's financial sector, addressing tax fragmentation, the VAT exemption for financial services, and the need for coordination. It calls on the Commission to review the VAT regime, consider policy options to reduce irrecoverable VAT and fragmentation, and assess replacing insurance premium taxes with VAT integration. It calls on the Council to decide on the Head Office Tax proposal and urges the Commission to propose innovative solutions for taxing the sector.

Key points

  1. Notes that Member States have introduced 91 sector-specific taxes on the financial sector, creating fragmentation and barriers to cross-border expansion.
  2. Calls for strengthened coordination at EU level, including implementation of the Pillar 2 Directive, anti-avoidance rules, and transparency in country-by-country reporting.
  3. Emphasises that simplification must not lead to deregulation or a race to the bottom in tax standards.
  4. Welcomes the FASTER Directive and calls for further progress on a coordinated framework for withholding taxes.
  5. Calls on the Council to decide on the Head Office Tax proposal for SMEs, considering Parliament's resolution.
  6. Notes that tax rules have not kept pace with new financial products and that fragmentation is worsened by neobanks and cross-border deposits.
  7. Underlines the need for improved data on effective tax burdens to enable evidence-based policymaking.
  8. Calls on the Commission to assess how tax measures can encourage investment to flow towards the EU and discourage outflows to non-cooperative jurisdictions.
  9. Calls on the Commission to review the VAT regime's impacts, consider options to reduce irrecoverable VAT and fragmentation, and safeguard consumers and public revenues.
  10. Calls on the Commission to assess the feasibility of replacing national insurance premium taxes by integrating insurance services into the VAT system.
  11. Recalls the investment gap of EUR 750 to 800 billion annually and the commitment to increase defence investment, suggesting fairer taxation could help.
  12. Acknowledges the lack of progress on the FTT proposal and notes the Commission's announcement of its withdrawal.

Who is affected

  • Financial institutions in the EU, including banks, insurers, and fintech firms, face changes in VAT treatment and tax coordination.
  • Retail consumers, particularly low- and middle-income households, are to be protected from extra costs from VAT reform.
  • Member States are called on to coordinate tax policies and implement VAT grouping consistently.

Figures and deadlines

  • 91 sector-specific taxes introduced by Member States since the financial crisis.
  • EUR 750 to 800 billion annual investment gap for climate, digital, and strategic autonomy objectives.

Legal basis: Articles 113, 114 and 115 of the Treaty on the Functioning of the European Union