Brussels, 13/02/2013 (Agence Europe) - The financial transactions tax (FTT) plans to be unveiled by the European Commission on Thursday 14 February 2013 would bring in the new tax in 11 countries, using the “enhanced cooperation mechanism”, on 1 January 2014 (Austria, Germany, Belgium, Spain, Estonia, France, Greece, Italy, Portugal, Slovakia and Slovenia) and would apply using the country of emission notion in addition to the country of residence of the financial body in question, as set out in the initial FTT plans mooted for the EU27 in September 2011.
The new plans would make the tax applicable not only to bonds and derivatives deals among the 11 participating countries, but also on deals anywhere else in the world if at least one of the parties to the deal has a headquarters in one of the 11 participating countries or the transaction covers a bond or derivative emitted by one of the 11. For example, the sale in Singapore by a Japanese bank to a British investment fund of a stock or share issued by a French bank would be taxed at 0.1%, and a derivative by 0.01%. To facilitate collection of the tax, non-participating EU member states would have to provide details of any relevant deals carried out in their country. By adding country of emission to country of residence, the Commission wants to prevent the tax encouraging the export of deals to countries where the FTT does not apply, including to the UK or other non-participating member states that would lead to imbalances within the single market. As with the 2011 draft legislation, the FTT would not apply to daily retail transactions by individuals and companies (loans, payments, insurance, savings and so on) or to investment banking, such as the raising of capital or financial operations carried out as part of a restructuring. Transactions between central banks (including the ECB) and the European Financial Stability Fund and the European Stability Mechanism or any financial transaction involving the European Union itself would also be exempt from the tax. (FG/transl.fl)