The scope of application of the VAT exemption related to the services supplied to their members by independent groups of persons (“IGPs”) has been strictly limited by recent decisions of the Court of Justice of the European Union, seriously affecting European banks.
This case law will lead to a significant increase of the cost of supplies of services between companies active in the financial and insurance sector, since VAT will be applicable on such services and the above mentioned taxable persons usually only benefit from limited input VAT deduction rights. It is essential to secure the continued applicability of the IGP regime on the financial and insurance sectors.
Therefore the EBF has sent a letter to the Commission to urge them to submit draft legislation to amend the VAT Directive to that effect.
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