EU policy makers should allow member states to experiment with real VAT systems for financial services. That is the conclusion of a number of studies we have conducted on the taxation of banks.
We have analysed the current VAT exemption for financial services as well as potentially poorly designed proposals to deal with this exemption. Our analysis provides three main conclusions:
- A real VAT system can be made to work
- The proposed alternatives such as a wage tax on financial institutions create more problems than they solve
- The need to move towards a real VAT based system becomes still more important with increasing digitalisation of the banking sector.
For further information, please contact Sigurd Næss-Schmidt