Brussels, 18/06/2013 (Agence Europe) -On Tuesday 18 June, the European Parliament's economic and monetary affairs committee adopted, by a wide majority, a report by Greek Socialist Anni Podimata on the updated European Commission proposals for a financial transactions tax (FTT) to be introduced by eleven countries using the enhanced cooperation mechanism (see EUROPE 10853). After tough talks and intense lobbying from various business circles opposing the FTT, the newly adopted report will be put to the vote in plenary in July. It has not been watered down, and recommends that on 1 January 2014 a financial transactions tax be introduced on a wide range of transactions, at the rate of 0.1% for shares and bonds and 0.01% for derivatives. The report combines country of residence rules, whereby at least one party to the transaction is registered in one of the eleven participating member states, rules on the country of emission of the financial product and rules on the transfer of property (the transaction will not be legally applicable if no FTT is levied). The amended report levies the transaction tax on currency deals and rejects the general exemption for pension funds, recommending instead that pension fund transactions be subject to a 0.05% tax rather than 0.1% in the first three years, by way of a compromise. It does, however, exempt intra-group transactions from the tax (payments between parent and subsidiaries), along with some market-making transactions and some transactions by non-financial companies. The report includes a special system with a reduced FTT for sovereignty bonds and repos.
Welcoming the vote, Anni Podimata said that, at the July plenary, the EP would send a strong message to the Council of Ministers that there are no excuses for postponing introduction of the tax on financial transactions. She said she wanted the FTT to be introduced ahead of the European elections in May 2014. (FG/transl.fl)