The European Parliament's Committee on Economic and Monetary Affairs (ECON) has released a draft report on February 4, 2026 calling for urgent reform of how the EU taxes its financial sector, with a particular focus on fixing an outdated tax system that has created a fragmented and complex tax landscape across Member States.
The VAT problem
The VAT exemption for financial services dates back to 1977, when technical constraints made taxation impractical. Those constraints have since …