Richard Cornelisse

Council of European Union – Press Release November 13, 2012

In EU development on 20/11/2012 at 10:25 am

Financial transaction tax

The Council took stock of developments regarding the introduction of a financial transaction tax (FTT) in a number of member states wishing to participate in enhanced cooperation, and discussed how to proceed with the dossier.

The Commission presented its proposal for a decision to authorise enhanced cooperation in this field. The Commission’s proposal, submitted on 23 October, would allow Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia to introduce the FTT via enhanced cooperation (15390/12).

In June, the European Council suggested that a decision be taken by December.

The Netherlands indicated that they would also be interested in participating, under certain conditions.

Based on article 329(1) of the Treaty on the Functioning of the European Union, the decision requires a qualified majority for adoption by the Council, with the consent of the European Parliament.

Adoption of the legislative act defining the substance of enhanced cooperation would require unanimous agreement by the participating member states.

A number of member states not wishing to join the enhanced cooperation indicated that they would wish to receive a more detailed assessment of its impact on the internal market before supporting the decision authorising enhanced cooperation.

In 2011, the Commission proposed a directive aimed at introducing an FTT throughout the EU (Doc. 14942/112), but Council discussions in June and July this year revealed support for the proposal to be insufficient.

In September and October, the 11 member states wrote to the Commission requesting a proposal for enhanced cooperation, specifying that the scope and objective of the FTT be based on that of the Commission’s original proposal.

That proposal involved a harmonised minimum 0.1% tax rate for transactions in all types of financial instruments except derivatives (0.01% rate).

The aim was for the financial industry, which many consider as under-taxed, to make a fair contribution to tax revenues, whilst also creating a disincentive for transactions that do not enhance the efficiency of financial markets.

Savings tax agreements

The Council discussed a proposed mandate that would enable the Commission to negotiate amendments to agreements signed in 2004 with Switzerland, Liechtenstein, Monaco, Andorra and San Marino on the taxation of savings income.

The presidency took note of the views expressed. In the light of reservations maintained by two delegations, it indicated that it would report to the European Council and would reflect on how to proceed with the dossier.

The aim of the proposal is to update the agreements so as to ensure that the five countries apply measures that are equivalent to an amended EU directive on the taxation of savings income.

Amendments to both the directive and the agreements would set out to improve their effectiveness in terms of information exchange.

In June and October, the European Council called for agreement to be reached rapidly on the proposed negotiating mandate.

Based on article 218(3) and (4) of the Treaty on the Functioning of the European Union, the draft decision requires unanimity for adoption by the Council.

Full report – Council of Euopean Union Press Release Brussels, 13 November 2012

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