taxud/2414/08 - European Commission - Europa

forces of this specific economic sector; inter alia they play a major role in the
development of pan-European payment and banking systems. These operators
need the right to opt for taxation to preserve and increase their competitiveness
(which in turn benefits the EU's overall competitiveness in this field).
- One of the consequences of applying the option might be that economic operators
start routing their supplies through two different legal persons depending on
whether the supply is B2B or B2C. However this would generate additional costs
for managing two different legal entities in a complex regulatory environment
generating costs which in the view of the Commission seem to keep a theoretical
potential for competitive distortions below a significant threshold.
- A potential conflict of objectives with national insurance premium taxes resulting
in double taxation of insurance services is debatable – de facto such doubletaxation
already exists today due to hidden VAT costs. Applying VAT to
insurance might in many circumstances rather decrease this double-taxation,
notwithstanding the transparent charging of the two taxes. And even if there were
to be a conflict, there are means to resolve it (e.g.: acceptance of double taxation
by economic operator; temporary moratorium for national taxes etc.).
- In an overall perspective it might have been acceptable to grant Member States an
option to provide their operators with an option to be taxed when financial and
insurance services were predominantly supplied at purely local level. Given the
progress in the creation of a true Single Market for financial services this is no
longer the case and it is thus impossible to defend an unequal treatment of
operators on this point across Member States.
There are some basic parameters which have a major influence on how the option for
taxation could or should work:
- The principal objectives of the proposals are to create legal certainty and reduce
the burden of economic operators and tax administrations. It is in this perspective
that the option for taxation should work. The option should thus be simple to
apply, it should be manageable for Member States and economic operators and
not create a higher potential for tax avoidance or fraud.
- The basic idea behind the option is that an economic operator supplying financial
or insurance services can opt for taxation, where he's capable to act like any other
economic operator supplying taxable services.
- In accordance with Article 44 of Directive 2006/112/EC as amended by Council
Directive 2008/8/EC 11 and applicable from 1 January 2010, the place of supply
for financial and insurance services supplied to taxable persons acting as such
(B2B supplies) will be the place where the recipient has established his business.
However, if those services are supplied to a fixed establishment of the receiving
11 OJ L 44 page 11 of 20.02.2008
11