CEA sets out concerns over EC's VAT review

CEA, the European insurance and reinsurance federation, has published a position paper that welcomes the European Commission's VAT - Insurance and Financial Services Review but highlights concerns over certain wordings in the review.

CEA director general Michaela Koller said: "CEA welcomes the review and its aims. Nevertheless, some of the proposed wording still needs to be debated so that the legal certainty and the systematic approach promised by the review can be delivered."

CEA is specifically concerned that legal uncertainty remains around the scope of the revised exemption system. In this respect issues relating to intermediaries and to the treatment of pensions and annuities require particular attention.

Under the VAT system, insurance and financial services companies do not tax the services they supply. In its position paper, CEA calls for greater clarity on the proposed option to tax, which aims to tackle the issues of non-recoverable VAT and concludes that the option to tax should be pan-European to ensure a level playing field.

CEA also calls for careful wording of the industry-specific exemption from VAT of groups' cost-sharing arrangements.

Background:

CEA is the European insurance and reinsurance federation. CEA's 33 national member associations represent more than 5,000 insurance and reinsurance companies.