The Committee on Economic and Monetary Affairs (ECON) of the European Parliament recently published a draft report on a coherent tax framework for the EU’s financial sector, describing the taxation of financial services in the EU as ‘highly fragmented’ that creates legal uncertainty, drives market distortions and encourages tax avoidance. In particular the report highlights failures to reform the VAT treatment of financial services and the need to address the distortions caused by the VAT exemption, which it says undermines the objectives of SIU and the Banking Union. Please discuss in the context of Ireland’s continued recognition of the ‘tax sovereignty’ principles embodied in the Lisbon Treaty.
