Brussels, 30/04/2014 (Agence Europe) - On Wednesday 30 April, the Court of Justice of the EU dismissed the action brought by the United Kingdom against the decision by the Council in 2013 (see EUROPE 10769) authorising eleven member states (Germany, Austria, Belgium, Spain, Estonia, France, Greece, Italy, Portugal, Slovakia and Slovenia) to establish enhanced cooperation in the area of financial transaction tax. The Court said that arguments by the United Kingdom are directed at the elements of a future tax and not on the authorisation to establish enhanced cooperation itself.
The United Kingdom requested the annulment of the Council's decision, taking the view that it authorises the adoption of an FTT which produces extraterritorial effects. It further maintains that, together with other directives on mutual assistance and administrative cooperation in the area of tax (2010/24/EU), the FTT will impose costs on non-participating member states
Through its decision, the Court rejects this case as premature. The Court states that its review is related to the issue of whether the granting of such authorisation is valid. That review must not be confused with the review which may be undertaken, in the context of a subsequent action for annulment, of a measure adopted for the purposes of the implementation of the authorised enhanced cooperation. The European judges find that the contested decision does no more than authorise the establishment of enhanced cooperation, but does not contain any substantive element on the FTT itself. Furthermore, the elements of a future FTT challenged by the United Kingdom are in no way constituent elements of the contested decision. They are solely contained, at this stage, in the Commission's proposals for a directive in 2011 and 2013 to implement the tax (see EUROPE 10462 and 10785). The contested decision contains no provision on the issue of expenditure linked to the implementation of enhanced cooperation. That issue can therefore not be examined before the introduction of the FTT.
This decision the first stage of the legal guerrilla war the United Kingdom is waging against the FTT, which it believes damaging to the business activities of the City of London. The British government believes that the decision confirms that the United Kingdom will be able to contest the final proposal ahead of the introduction of an FTT if it is not in its interest and if it undermines the integrity of the single market. It also claims that it would have been in danger of not being able to do this if it had not lodged its action at this present time. Speaking on behalf of the European Commission, Emer Trayor, the spokesperson to the commissioner for taxation welcomed the decision, which “fully endorses the legitimacy of the Council's decision to authorise 11 member states to progress with a common FTT by way of enhanced cooperation”. The Commission “is hoping that today's decision will give another boost to the 11 member states in their negotiations for a common FTT”. (FG)