Brussels, 30/11/2015 (Agence Europe) - On Tuesday 8 December, the finance ministers of the EU will carry out an exchange of views on the state of progress with the work carried out in a group of 11 on a financial transactions tax (FTT).
After the most recent ministerial meeting on this dossier, the European Commission had hoped to hold a guideline debate at the Ecofin Council, but will have to make do with a 'stock take'. However, this will not prevent an agreement from being announced, if there is an agreement, one source explained.
According to a document which followed the technical meeting of the EU28 on 25 November (see EUROPE 11437), the 17 countries not participating in the FTT firmly defended their interests, both on the question of the principle of taxation (residence or issuance) and on “many other elements of the FTT”. “Some non-participating member states stated that the application of 'issuance' and/or 'residence' principles to the taxation of shares and derivatives should provide for a consistent solution regarding the scope of transactions in derivatives subject to the future FTT, especially with regard to how the future FTT, agreed under the enhanced cooperation, would impact the markets in the non-participating member states”, the document reads.
For the remainder, the open questions are already well known. The option was discussed of going along with the Commission's proposal regarding the scope of transactions in derivatives and limiting the scope of transactions in shares to those issued in the participating countries. An option which would allow the participating countries to go further on transactions in shares was also discussed. However, “it was stressed that the design of the future FTT should not lead away from the key objectives underlying this legislative proposal and especially should not create a fragmentation of the single market”, the document explains.
The meeting of 25 November also focused on a definition of market-making activities which could be exempted from the tax. It was also stressed that any exemptions from the FTT should be designed in such a way as to minimise the risks of a fragmentation of the single market, avoid tax evasion and not create any potential loopholes. The question of exemptions for derivatives related to sovereign bonds, and to what extent, was also discussed.
The work will also continue on possible exemptions to respond to states which are concerned about the impact on the real economy or on pension funds. (Original version in French by Elodie Lamer)