Brussels, 29/04/2014 (Agence Europe) - Little progress seems to have been made by the eleven financial transactions tax (FTT) countries in their enhanced cooperation bid to introduce the new tax since they met in Athens on 2 April. The most that can be expected at this stage is a statement by the eleven countries on 6 May about the first introductory phase.
A memorandum from the Greek Presidency of the Council of the EU dated 16 April 2014 that this newsletter has seen, written for the Coreper meeting on Wednesday that is due to discuss the matter and the Ecofin Council next week says that “one way to make progress would be to continue to work on gradual introduction of the tax”, which would initially only be levied on shares and derivatives. The Presidency admits that more technical work will be needed on the design of the FTT and how it could be introduced bit by bit. Earlier in April, the bones of contention were the scope of application (which derivatives it should be levied on initially), whether countries are to work on the basis of ownership or issuance, and how income generated by the tax is to be shared out (see EUROPE 11052 and 11056).
The Presidency's memorandum states that some non-participating countries have expressed concern about the potential economic impact and legal issues raised by the FTT and the potential cost of levying it that they might have to bear. They are calling for a number of players and transactions to be exempt from it. On Wednesday, the European Court of Justice will be issuing its ruling on the case lodged by the United Kingdom, which is querying the legality of the enhanced cooperation mechanism. (EL)