Brussels, 12/05/2015 (Agence Europe) - The eleven member states involved in the enhanced cooperation to bring in a financial transactions tax (FTT) have still not agreed on what they want, but at least know what they don't want.
They have reduced the number of basic options for the FTT from three to two, having decided to abandon the scenario based directly on the principle of the issue.
This is a victory for the small countries which issue shares, as they feared that they could lose out. This principle also had the support of France and Italy, whereas the European Commission supported the principle of residency contained in its initial proposal (see EUROPE 11264).
It now remains for the ministers to put together the 24 components which will make up the backbone of the FTT (taxable transactions, rates, etc.). The Belgian finance minister, Johan Van Overtveldt, explained that the ministers had been presented with a fairly complex and incomprehensible matrix.
Although the question of the taxation principle to be applied was a major sticking point, there is an even larger one still to overcome. Out of the two scenarios still in contention, each of which is based on the principle of residence, the first model would have the greatest tax base, in terms of the derivatives to be covered, while the second would have narrower coverage (only shares issued in the Eleven).
For derivatives, the question for all models is which derivatives will be covered. The question of the scope of application ranges from the taxation of all derivatives to taxing only equity derivatives.
“You know France's position: broad base, low rate”, the French finance minister, Michel Sapin, said when leaving the Ecofin Council on Tuesday 12 May. He believes that a decision will be possible in June and said that this has been confirmed by the Eleven. In June, an Ecofin Council of all 28 member states will also have the FTT on its agenda. The states which are not members of the enhanced cooperation are not expected to jump for joy at the fact that the principle of residence has been retained, as they opposed this (see EUROPE 11193).
The eleven states participating in the FTT are France, Germany, Austria, Portugal, Spain, Belgium, Slovenia, Slovakia, Greece, Estonia and Italy. (Elodie Lamer)