Brussels, 23/10/2012 (Agence Europe) - On Tuesday 23 October, the European Commission adopted its proposal for a decision noting that the launch of enhanced cooperation for establishing a financial transaction tax (FTT) by ten member states will not be detrimental to the internal market. It now trusts that the proposal will be endorsed by the end of the year by the European Parliament and by the Council (it is to be presented to the Ecofin Council on 13 November, where it should be approved by qualified majority). The Commission will then present a detailed proposal (probably in early 2013) based on its September 2011 proposal (see below), specifying in particular the tax base and rate of tax on the basis of which the participant states should negotiate and declare their unanimous opinion.
Taxation Commissioner Algirdas Semeta welcomed the initiative taken by the 11 member states (Estonia, the 11th, has not yet applied to join), explaining that the tax will benefit the whole Union even if it is only applied by a number of member states, saying it will create a sounder and more homogenous single market and allow the stability of the financial sector to be enhanced. Furthermore, it will procure new income and more equitable tax systems for participant states, the commissioner said, calling on the Parliament and Council to maintain the momentum and to rapidly give member states the go-ahead if they wish to move on to a European financial transaction tax. President Barroso also applauded the initiative that will allow the financial sector to contribute to recovery, indicating moreover that the Commission will, in parallel, present an action plan by the end of the year against fraud and tax evasion, including tax havens.
According to the Commission's proposal of September 2011, the FTT would concern all operations on financial instruments conducted between banks, stock exchanges, investment firms, insurance companies and hedge funds (i.e. 85% of all transactions), one of which at least is located in an EU member state. The exchange of shares and securities would be taxed at a rate of 0.1% and derivatives contracts at a rate of 0.01%. This would be a minimum rate, with each EU member state being free to apply a higher rate. Income estimated by the Commission would be around €57 billion. For the ten states participating in enhanced cooperation (France, Germany, Italy, Spain, Austria, Belgium, Portugal, Greece, Slovenia, Slovakia - Estonia, the 11th, not having yet requested to join), the amount of the income would likely be higher than €10 billon, the French minister for European affairs, Bernard Cazeneuve, said, cited by La Tribune. It will vary according to the tax base and the rate that is finally adopted. (FG/transl.jl)