Brussels, 17/12/2015 (Agence Europe) - Estonia is looking into how it can officially leave the enhanced cooperation on the financial transactions tax (FTT) without interrupting the work of the 10 other participating countries (Belgium, Greece, Germany, Spain, Slovenia, Slovakia, Italy, France, Austria and Portugal). A legal grey area is leaving everything hanging in the balance.
At the recent Ecofin Council, the Estonians said that they were no longer able to adopt the tax as proposed at this stage. The small country stresses that if the application of the principles of residence and issuance were to be chosen only for the shares of the 11 states instituting the FTT, it would only be able to collect around 20% of the potential revenue.
An Estonian source explains that the delegation will no longer be attending the technical discussions on the FTT. Although the Commission is continuing to assert that the departure of the Estonians is only temporary, Estonia is in fact currently looking for a legal way of leaving the enhanced cooperation once and for all. The Treaty makes no provision for the possibility of leaving enhanced cooperation and legal uncertainty reigns on this point. Tallinn has concerns that its official departure will, from a legal point of view, interrupt the work of the 10 other participating states, which may ultimately have to start again from scratch, in other words by sending a letter to the Commission to indicate their involvement in the enhanced cooperation on the basis of an amended Commission proposal, or seeking a green light from Ecofin and the EP for a new enhanced cooperation.
From another point of view, Estonia is concerned that if it does not leave the enhanced cooperation officially, it will have to apply the directive, as it would legally still be considered a participating state, even if it no longer is in practice. It is also important to note that if Tallinn does not execute an official departure in order to avoid interrupting the work, the 10 other participating states will need its vote when the time comes, as the final text is required to be supported unanimously by the states participating in the FTT, on paper at least. However, a Council source said that in order to leave the enhanced cooperation, there is no specific procedure. A declaration from Estonia at an Ecofin Council may well suffice.
Whether the FTT can be successful with 10 or 11 members goes beyond the stakes of the FTT alone. The Commission wants to show that enhanced cooperation on fiscal matters works, as it is in favour of proposing one for the common corporate tax base (CCTB, or CCCTB, if this tax base is one day 'consolidated'). An Estonian source noted that if it turns out to be difficult to leave enhanced cooperation in the framework of the FTT, they would think twice before getting involved with one on the CCCTB. An easy exit for Estonia from the enhanced cooperation on the FTT would be important for all future fiscal cooperation projects, the source added, as the states would be able to see that they can join a project and leave it without any particular problems. (Original version in French by Elodie Lamer)