PensionsEurope has said that all pension scheme participants should be “protected from unnecessary value added tax (VAT) burdens.

Publishing its response to the European Commission (EC) on its VAT roadmap, the association said it supports the EC’s objective to simplify the life of taxpayers operating in the single market and it welcomes the review of the VAT rules.

“In general, we believe all pension fund participants should be protected from unnecessary VAT burdens, regardless the character of the schemes as well as the member state in which the services are being received. The current exemption for special investment funds should be extended to all pension schemes,” it stated.

Even though the VAT exemption is in place, in some countries there is a stamp duty (for instance 4 per cent) that is not subject or exempt from VAT and there is no possibility of any deduction, Pensions Europe explained.

“We urge the EC to recommend member states to exempt (at least) pension schemes from this duty (or decrease their duty to no more than 1 per cent).”

“Finally, we believe that establishing a cross-border investment-friendly tax environment in the EU not only requires removing unfair tax treatment but also introducing tax incentives,” it concluded.

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