A single amendment tabled to the European Parliament's own-initiative report on a coherent tax framework for the EU's financial sector replaces a call for a Commission review of the VAT regime with a welcome of a Commission study published on 20 June 2026. The amendment, whose author is not identified, changes the legislative posture from requesting future action to acknowledging completed work and its findings.
The amendment, proposed to report A10-0169/2026 by rapporteur Matthias Ecke, would delete the original text's call on the Commission to review the impacts of the current VAT exemption for financial services and to bring forward a proposal for reform. Instead, it welcomes the Commission study and highlights its conclusion that, due to the VAT exemption, providers of financial services do not have the right to deduct input VAT. The amendment also removes specific references to policy options such as more effective VAT grouping and reforming the exemption, which were in the original text.
This change represents a significant de-escalation of the Parliament's demand for immediate legislative action on the VAT treatment of financial services. The original report had called for a review to identify distortive impacts and for a legislative proposal to reform the VAT exemption. The amendment frames the distortion as a confirmed fact rather than a hypothesis to be investigated, but removes the explicit request for a Commission proposal.
The amendment is still to be examined and voted on in committee and subsequently in plenary. If adopted, it would soften the Parliament's stance on VAT reform for the financial sector, potentially reducing pressure on the Commission to act swiftly. The financial services industry, which has long argued that the VAT exemption creates competitive distortions and compliance costs, may view the shift as a setback, while consumer and civil society groups pushing for reform may see it as a missed opportunity. The Commission, for its part, has already completed the study and may welcome the Parliament's acknowledgment of its work.
The report is scheduled for a plenary vote later in the year. The Council's position on the matter remains to be seen.