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Insurance Europe has published its response to a consultation conducted by the European Commission on its review of VAT rules for financial and insurance services.
The VAT Directive is outdated and is not correctly applicable to modern financial services, which it puts at a disadvantage compared to other sectors. Europe’s insurers are therefore calling for the VAT Directive to be reformed to reduce hidden VAT and to increase the possibilities for VAT to be reclaimed by financial companies in general, and insurers in particular.
Insurance Europe reiterated its support for cost sharing groups and asked for more clarity and legal certainty about the scope of VAT exemptions to provide a more refined criteria and extensive list of exempt services.
Furthermore, the introduction of an option for member states to tax should not come in addition to any insurance premium taxes, which would lead to double taxation and an increase in costs for customers.
In addition to its response, Insurance Europe included an annex to provide additional background information.