Financial transaction tax tabled by European Commission

The details of the Financial Transaction Tax (FTT) to be implemented under enhanced cooperation were set out in a proposal adopted by the European Commission on the 14 February 2013.

As requested by the 11 Member States1 that would proceed with the tax, the proposed Directive mirrored the scope and objectives of the original FTT proposal put forward by the Commission in September 2011 (IP/11/1085). The approach of taxing all transactions with an established link to the FTT-zone is maintained, as are the rates of 0.1% for shares and bonds and 0.01% for derivatives.

When applied by the 11 Member States, this Financial Transaction Tax was expected to deliver revenues of €30-35bn a year.

There are certain limited changes in FTT proposal of February 2013 compared to the original one, to take into account the fact that the tax will be implemented on a smaller geographical scale than originally foreseen. These changes are mainly to ensure legal clarity and to reinforce anti-avoidance and anti-abuse provisions.

• Primary Source

ESO: Background information: Group-of-11 gets go ahead for financial transaction tax http://www.europeansources.info/record/group-of-11-gets-go-ahead-for-financial-transaction-tax/

European Commission: RAPID: Press Release, IP/12/115: Financial Transaction Tax under Enhanced Cooperation: Commission sets out the details http://europa.eu/rapid/press-release_IP-13-115_en.pdf

European Commission; DG Taxation and Customs Union; Taxation: Other taxes: Financial Sector: Taxation of the financial sector http://ec.europa.eu/taxation_customs/taxation/other_taxes/financial_sector/index_en.htm

EurActiv, 15.02.13: Britain wary as EU Commission launches financial transaction tax http://www.euractiv.com/euro-finance/mixed-reaction-financial-transac-news-517836

EUObserver, 15.02.13: Double taxation row as Brussels unveils transactions levy http://euobserver.com/economic/119072

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