Brussels, 08/05/2015 (Agence Europe) - On Monday 11 May, just before the Eurogroup meeting, the finance ministers of the eleven countries involved in the financial transactions tax (FTT, viz. Germany, France, Belgium, Slovenia, Slovakia, Greece, Portugal, Italy, Spain, Austria and Estonia) will meet for a progress report.
The European Commission says it is not clear from the technical meetings whether there is a genuine desire to move forwards. A source from a participating country told this newsletter on Friday that what goes for one country doesn't go for others.
The work is divided into 24 building blocks that influence the nature of the FTT and the countries are trying to see how the 24 blocks (such as tax collection, transactions liable for the tax (intra-group transactions, small companies, non-quoted companies), tax rates, tax basis, market-making, territoriality and so on) can be combined in the different FTT models, explains a document from the Austrian finance ministry that this newsletter has seen. The countries have agreed to draw up a list of key questions to be decided upon before looking at the tax in detail. These key issues are connected with the tax's geographical scope, derivatives and the transactions it will be levied on.
When it comes to geographical scope, three or four options have been mentioned, explains a different document. The first two are based on the principles of taxation set out in the European Commission's initial proposal (residence, counterparty and emission) and the third option is strictly based on the emission principle. The first option would have the biggest taxable basis, and the second and third would have a narrower basis (only shares issued in the eleven countries). For derivatives, nothing has been ruled out for any of the three options (ranging from all derivatives to only share derivatives). The tax basis would be very restricted for the third option because of the sole application of the principle of emission.
The choice of option will depend on concerns about the desire to respond to the potential risk of tax income relocating abroad and the question of how the tax income will be divided up among the eleven participating countries. Small delegations fear they will lose out. The problem of estimating the impact of the FTT on each country has been pointed out, and means that an overall impact assessment study may be carried out.
A source says that on Monday, the meeting will give experts some guidelines and, in the best case scenario, whittle down the number of options. The Presidency hopes a decision will be made in June. (Elodie Lamer)