Read the full position hereThe exemption of financial and insurance services from VAT was introduced in 1977 as an exception to the general rule that VAT is to be levied on all services supplied for consideration by a taxable person. The definitions and their interpretations need an adaptation, development and harmonization, which in our view is necessary to avoid discrepancies in the application of the exemptions and to contribute to legal security. More specifically, the VAT exemptions are too tight, and the definitions of exempted services are not up to date. They are not taking care of digitalized business approaches and banking services. Moreover, the division of work processes is not reflected properly, e.g. payment services: preparatory services are taxable. A modern definition of effort pooling would be needed and, again, the overall legal certainty could be increased. The lack of input tax deduction or the input tax allocation are a problem in some Member States (definitive cost burden). Outsourcing regularly is taxed. They can not use Cost Sharing Arrangements.