The ABBL advocates for more competitiveness in tax matters

The ABBL is calling for EU tax reforms that enhance competitiveness, simplify taxation for financial institutions and support sustainable economic growth across the European financial sector.

Priority to competitiveness rather than compliance

The ABBL, through its Secretary General Camille Seillès, stressed the importance of prioritising competitiveness and qualitative growth in tax matters. Mr Seillès noted that the financial sector has been dominated by compliance over the past fifteen years. With the widespread adoption of automatic exchange of information, financial institutions have effectively become auxiliary arms of the tax authorities.

The challenges of taxing financial transactions

Mr Seillès also voiced his concerns about the taxation of financial transactions, calling on Brussels to reconsider plans for enhanced cooperation in this area. He stressed that, despite Luxembourg’s absence from this initiative, it runs counter to the objective of integrating European capital markets, which could lead to fragmentation.

Simplification of withholding tax procedures

Cross-border investment within the EU is hampered by the complexity and slowness of procedures for claiming withholding tax. Mr Seillès stressed the need to streamline processes, referring to the European Faster project supported by the Belgian Presidency. However, he criticised the additional obligations proposed by Germany, suggesting that the current form of the project risked hindering transactions rather than speeding them up.

Modernising VAT treatment

Modernising VAT treatment for financial services emerged as another priority for the ABBL. Mr Seillès highlighted the current challenges facing banks, including the limited deduction of input VAT and legal uncertainties. He stressed the need to harmonise and simplify the VAT regime in order to level the playing field between established banks and new market entrants.

Exchange of tax information

The extension of the scope of the DAC Directive, the European instrument for exchanging tax information, has raised concerns about data confidentiality and proportionality. Mr Seillès called for a critical assessment of the actual usefulness of the data for tax authorities, stressing the need to balance data exchange with privacy protection, particularly in light of GDPR regulations

Common corporate tax base

The ABBL remains cautious about the European Commission’s BEFIT project, which aims to establish a common consolidated corporate tax base. Mr Seillès expressed reservations about the complexity of the project and potential conflicts with OECD standards and national tax systems.

In conclusion, the ABBL actively advocates reforms that would modernise and streamline tax policies within the EU financial sector. While acknowledging the positive steps taken by the government, including the modernisation of investment tax credits, the ABBL is striving for further positive outcomes to support qualitative and sustainable growth.