The article discusses the EU’s longstanding VAT exemption for financial services, noting that the exemption was introduced in 1977 and remains in place across EU member states, Iceland, and the UK. It reviews the European Parliament’s February 2026 draft report, which calls for modernising the tax framework, highlights the 91 sector‑specific taxes that have emerged, and explores options such as abolishing the exemption for B2B services or differentiating between B2B and B2C. The piece underscores the hidden costs, market distortions, and competitiveness concerns that the current exemption creates.
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Numeral · about 17 hours ago
The EU imposes VAT on SaaS and software sales, applying a customer-location rule for both B2B and B2C transactions. SaaS sellers must collect VAT IDs, validate them via VIES, and apply the reverse charge for B2B sales to VAT-registered buyers.
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EU VAT authorities now routinely audit e-commerce sellers, matching platform data against returns. The article outlines the audit process, DAC7 obligations, and record-keeping requirements.
Numeral · 1 day ago
EU VAT compliance for U.S. sellers is complex, with new changes effective 1 July 2026. The EU removed the €150 de minimis exemption, so customs duties now apply to all imports, including those under €150. U.S. sellers must use the Import One Stop Shop to collect VAT at checkout for orders under €150.
SGS · 3 days ago
EU lowers import duties on U.S. goods as Regulation (EU) 2026/1455 enters into force on 1 July 2026. The regulation eliminates duties on many industrial products, reduces duties on agricultural goods, and introduces tariff-rate quotas for selected items.
Numeral · 4 days ago
The EU One Stop Shop (OSS) is a VAT scheme that allows businesses to register in one member state and file a single quarterly return for cross-border B2C sales. It applies to EU-based companies with aggregate sales above €10,000 and to non-EU businesses with a fixed establishment in the EU. The scheme simplifies compliance but does not replace domestic VAT returns.
International Tax Review · 5 days ago
EU: ViDA, the Council Directive (EU) 2025/516, will harmonise digital reporting for B2B transactions from 1 July 2030, affecting national reporting systems. Existing real-time reporting systems in force before 1 January 2024 may transition by 2035, while new systems introduced after that date must comply by 1 July 2030. Member states retain limited authority for B2C reporting and other non-harmonised obligations.
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Key Takeaways
It proposes abolishing the exemption for services supplied to taxable businesses (B2B) to allow input VAT deduction and reduce hidden costs, while retaining some protection for consumers.
The report identifies 91 sector‑specific taxes, including financial transaction taxes and bank levies.
The exemption was introduced in 1977 as a practical workaround.
The withdrawal left a clear policy gap, prompting the report to call for coordinated reforms with existing financial transaction taxes and bank levies.
The exemption remains in place in EU member states, Iceland, and the UK.
Primary source
Read full article on LinkedIn by Rui MarquesThis summary was published on VATfaqs.com on 16 February 2026. It relates to VAT developments in European Union. The original source is LinkedIn Article by Rui Marques.
