Brussels, 22/01/2013 (Agence Europe) -Meeting in Brussels for an ECOFIN Council on Tuesday 22 January 2013, EU finance ministers gave the go-ahead for the launch of enhanced cooperation by 11 member states (Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia) to introduce a financial transactions tax (FTT) along the lines of the one unveiled by the European Commission in September 2011.
Irish finance minister Michael Noonan, who chaired the meeting, said that a very clear majority at the COREPER meeting last week had agreed on giving the go-ahead to the 11 FTT countries so the ministers had not needed to formally vote on the matter. He added that if there had been a vote, even opponents to the project would not have voted against, but simply abstained. During the debate, only the United Kingdom, Luxembourg and the Czech Republic make it clear that they would abstain, but Sweden and Bulgaria, which had initially opposed the idea, came round in the end. The launch of enhanced cooperation for the third time on tax issues was welcomed by EU Taxation Commissioner Semeta, who called it a milestone in the world history of taxation.
The exact nature of the tax to be introduced by the 11 countries has not yet been decided, but will be the subject of a European Commission proposal probably to be published at the end of February. In October 2012, the countries wanting to join an FTT asked the Commission to ensure that the scope and aims of the new tax be as what was set out in its draft legislation to this effect in 2011, in other words a standard 0.1% minimum FTT for all types of financial transactions except for derivatives (for which a tax of 0.01% would be levied) in order to make the financial sector pay its fair share towards the national purse and to discourage high-frequency speculation. Commissioner Semeta said that the Commission's new proposal would be largely based on this idea with a few minor changes, but would also include the idea of the tax being levied if only one of the parties is a participating country. In order to avoid the FTT, both sides of a transaction would have to be registered in a country where the FTT does not apply.
It is said that the 27 member states will be fully involved in the technical and political negotiations about to start on the tax as they will have the option of joining the enhanced cooperation at any time. Only participating countries will be able to vote, however, and will have to approve the legislation unanimously. The talks will cover the impact of the tax geographically, on financial institutions and, of course, what is to be done with the revenue. The crucial issue is to avoid double taxation because some countries not involved in the FTT levy stamp duty on financial transactions. The Commissioner said the FTT would raise less than the €57 billion a year that would be raised if the tax were levied EU27-wide, but more than 11/27 of that figure because the eleven participating countries represent two-thirds of EU27 GDP and 90% of eurozone GDP. He announced that alongside details of the tax itself, the Commission would also be unveiling an impact assessment. (FG/transl.fl)