A coherent tax framework for the EU's financial sector

Wording as published by the EP, in English.

1. Amendment 3Rejected

   Paragraph 27

   Tabled by Matthias Ecke, rapporteur · rapporteur

   27. Removed: Calls on the Commission to review the impacts of the current VAT regime on the financial sector and to publicly share this analysis; Added: Welcomes the comprehensive study published by the Commission in June 2026 on the taxation of the financial sector1a; highlights the conclusions of the study, which confirm that due to the VAT exemption, providers of financial services do not have the right to deduction, which in turn means that many of the sector’s input purchases are subject to VAT, resulting in a tax burden that does not appear on invoices and therefore is commonly referred to as ‘hidden’ VAT; stresses that, according to the study, the original technical rationale for the VAT exemption no longer remains fully valid, and that, combined with divergent national sectoral taxes, the current tax framework creates high compliance burdens, distortions, complexity, legal uncertainty and fragmentation; further highlights that, according to the study, the current framework is not aligned with broader EU policy priorities such as the savings and investment union strategy, and that the most effective way to address the root causes would be a more fundamental reform of the VAT exemption and its interaction with sectoral taxes; calls on the Commission to consider policy options to address identified distortive … ensure that the financial sector makes a fair contribution to public revenues; Added: 1a European Commission, ‘Taxation of the Financial Sector’, June 2026.

2. Amendment 4Rejected

   Paragraph 33

   Tabled by Matthias Ecke, Bruno Tobback, Bernd Lange +96 · Members

   … the Council, despite extensive debate, both under unanimity and enhanced cooperation, and Removed: takes note of Added: regrets the Commission’s announcement about the withdrawal of the FTT proposal in its 2026 work programme; Added: calls on the Commission to ensure that any proposal for a coherent framework for taxing the EU financial sector presents a concrete plan to address the policy gap created by the withdrawal of the FTT proposal; emphasises that any new proposal should be no less ambitious than the original FTT proposal in ensuring a fair contribution from the financial sector under clear and predictable rules;

3. Amendment 5Rejected

   Paragraph 34 a (new)

   Tabled by Matthias Ecke, Bruno Tobback, Bernd Lange +93 · Members

   Added: 34a. Highlights the fact that coordinated temporary windfall taxes can complement long-term sector-wide taxation by providing short-term revenue in times of crisis without destabilising markets or distorting long-term commercial activity; notes that, in recent years, the profitability of EU banks has increased, reaching historically high levels1a; calls on the Commission to bring forward a legislative proposal for the temporary taxation of exceptional profits in the financial sector, ensuring that the sector makes a fair and coordinated contribution at EU level in periods of extraordinary macroeconomic circumstances; 1a European Banking Authority, ‘Risk Assessment Report of the European Banking Authority – June 2025’.

4. Amendment 6Rejected

   Paragraph 35 a (new)

   Tabled by Matthias Ecke, Bruno Tobback, Bernd Lange +97 · Members

   Added: 35a. Notes that financial sector tax regimes should not be used to attract profits and financial activities for tax-driven profit shifting rather than genuine economic activity; notes that exceptionally large volumes of foreign direct investment remain concentrated in low-substance financial structures, providing evidence that such practices persist; regrets that this undermines Member States’ revenues, tax sovereignty and the objectives of the Savings and Investment Union;