Brussels, 26/05/2015 (Agence Europe) - A new technical-level meeting is due to take place on Friday 29 May on the financial transactions tax (FTT) to try to assemble the various FTT building blocks in a model that suits all the delegations. Concerned to avoid negatively impacting on markets outside the area where the FTT will apply, Austria, which his chairing the talks, says that a more detailed debate is required at EU28 level, if possibly at the June Ecofin Council meeting, or later if delegations would prefer that.
A number of key issues need to be settled before the details of the secondary features can be discussed. These key issues cover territory for shares and derivatives, the scope of application for derivatives and the transactions on which the tax will be levied. When it comes to territory, two scenarios are being discussed. For both shares and derivatives, a first scenario (with wider scope) would allow the accumulation of the principles of residence, issuance and counterparty in a hierarchy yet to be decided. For shares, a second scenario (with medium scope) would combine the principles of residence and issuance, applied only to shares in the FTT area.
When it comes to the scope of application for derivatives, an initial option would be to tax all derivatives bar interest rate or public debt derivatives, whereas a second option would tax virtually all derivatives. Other issues to be sorted out are whether to tax gross or net on transactions, whether market-making should be exempt, who should be taxed in a transaction chain and what should be the basis of taxation for derivatives?
In an interview with Reuters after the last Ecofin meeting, Austrian Finance Minister Hans Joerg Schelling was not very optimistic about it being possible to have the tax implemented as planned on 1 January 2016, feeling that 2017 was a more likely starting date. (Elodie Lamer)