Brussels, 15/02/2013 (Agence Europe) - The details of the financial transactions tax (FTT) to be introduced in 2014 by 11 eurozone nations under the “enhanced cooperation” procedure (Germany, Austria, Spain, Belgium, Estonia, France, Greece, Italy, Portugal, Slovakia and Slovenia) have given rise to criticism. EU Taxation Commissioner Algirdas Semeta answered the critics when unveiling the proposal recently.
The US Treasury and business milieus are concerned about how the FTT would operated outside the 11 participating countries, saying it would amount to a surcharge on US investors in the United States and elsewhere carrying out operations with a connection with the 11 nations under the country of emission and country of residence rules (see EUROPE 10786 and 10785). Semeta said that the FTT, as currently designed, meets international law and territoriality rules because the country of emission and country of residence rules are already widely used in international tax law and the tax will only be levied on deals with a connection with the 11 nations. He admitted, however, that he would be travelling to the United States next week to allay fears and discuss the matter with the US tax authorities and other bodies.
To the objection from the British government and British business that the tax could negatively impact on the City of London because of its close links with financial bodies in the eurozone and the danger of double taxation because of the United Kingdom's stamp duty, the Commissioner responded that the planned tax covers 11 eurozone nations and double taxation in those 11 countries would be removed by the Commission, the other eurozone nations being free to choose whether to join and whether to levy their own taxes. He said there were already double taxation problems within the single market due to the United Kingdom and nine other countries introducing their own, similar, taxes a few years ago. He added that the double taxation problem for the 11 nations and other EU27 countries would be discussed in the FTT negotiations among the EU27 and each case would be examined on its own merits. The Commissioner said that non-FTT member states are required to provide relevant information to the FTT nations' tax authorities under the EU tax cooperation and mutual aid rules.
Stressing the importance of the enhanced cooperation on the FTT, which will for the first time levy a tax on a regional basis, and which is a first step in a wider tax harmonisation process at EU27 level, the Commissioner urged the participating countries to press ahead. (FG/transl.fl)