On 7 July 2026, the European Parliament adopted a resolution calling for a coherent tax framework for the EU's financial sector, urging the European Commission and the Council to address tax fragmentation, reform the VAT exemption for financial services, and promote a more coordinated tax environment. The resolution, based on an own-initiative report by the Committee on Economic and Monetary Affairs, aims to support the Savings and Investments Union (SIU) and broader EU strategic objectives by reducing barriers to cross-border investment and enhancing competitiveness.
The resolution highlights that since the financial crisis, Member States have introduced 91 sector-specific taxes, creating a fragmented landscape that generates operational costs and structural barriers to cross-border expansion. It calls for strengthened coordination at EU level to reduce this fragmentation. On VAT, the Parliament urges the Commission to review the impacts of the current VAT exemption for financial services, which dates from 1977, and consider policy options to reduce irrecoverable VAT, improve legal certainty, and strengthen competitiveness, while safeguarding consumers and ensuring the sector's fair contribution to public revenues. The resolution also calls for consistent implementation of VAT grouping across Member States and exploration of cross-border VAT grouping with binding anti-abuse safeguards.
For emerging financial services, including crypto-assets, decentralised finance, fintech, and derivatives, the Parliament requests clarification of VAT treatment to ensure technological neutrality and a level playing field. On the Head Office Tax system for SMEs, it calls on the Council to decide on the Commission proposal, taking into account Parliament's legislative resolution. Regarding the Financial Transaction Tax (FTT), the resolution acknowledges the lack of progress on an EU-wide FTT and the Commission's withdrawal of the proposal, while recalling the 2020 roadmap for introducing new own resources including an FTT. It also calls on the Commission to assess the feasibility of replacing national insurance premium taxes by integrating insurance services into the VAT system.
The resolution underlines the need for improved transparency and better use of data on the effective tax burden across the EU financial sector to enable evidence-based policymaking. It also calls on the Commission to assess how tax measures can encourage investment to flow towards the EU and discourage outflows to non-cooperative jurisdictions. If implemented, the proposed reforms would reduce market fragmentation, lower compliance costs for financial institutions, and support the SIU objectives by mobilising European savings for productive investment. However, any reform is required to safeguard consumers, particularly low- and middle-income households, and avoid additional costs on retail services. The resolution applies political pressure on the Commission and Council to advance stalled legislative files, including the Head Office Tax system for SMEs and VAT reform.