Under the current VAT Directive, most financial and insurance services are exempt from VAT. Existing rules - introduced in 1977 - are often criticised for being outdated, complex, difficult to apply and not having kept pace with the development of new services in the sector. The European Commission is currently in the process of introducing updated rules.
 
EFAMA strongly supports the VAT exemption for services related to EU-based special investment funds as defined by Member States, such as UCITS and non-UCITS, including pension funds. The maintenance of this exemption is crucial at a time when the EU is faced with a huge savings gap. This exemption has a substantial social impact by favouring savings of “retail” investors, who require a clear and stable tax environment. Removing the exemption for management services of EU funds would result in disruption for end-investors.