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28 May 2014

FTT - Presidency's working party on tax questions (WPTQ)


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Following discussions at 6 May ECOFIN Council, the Hellenic Presidency took note of a joint statement by ministers of 10 participating countries. The Presidency noted the intention of participating countries to work on a progressive implementation of the FTT.


In order to elaborate the political orientation of the above statement on the technical level, the Presidency believes that work at this stage should, apart from the identification of the derivatives to be included in the next phase, also advance on the procedural aspects of the progressive implementation of the FTT.

1. One option envisaged could be that only the content and the timetable of the first step is determined.

This would mean that the Commission Proposal is amended, so that its scope includes only the taxation of shares and the derivatives that will be identified by the WPTQ. This Directive would thus impose a common system of taxation for transactions in shares and identified derivatives. This would enable individual Member States that already impose or would like to impose taxation for other products that are not included from the beginning of a progressive implementation, to maintain existing or introduce such taxes. This Directive would be implemented at the latest on 1 January 2016. 

2. A second option envisaged could be that only the content and the timetable of the first step is determined but a review clause(s) for the extension to other products is inserted.

This would mean that the Commission Proposal is amended, so that its scope includes only the taxation of shares and the derivatives that will be identified by the WPTQ. This Directive would thus impose a common system of taxation for transactions in shares and identified derivatives. Moreover, the Directive could provide that individual Member States, that would like to impose taxation for other products that are not included from the beginning of a progressive implementation, would be allowed doing so. This Directive would be implemented at the latest on 1 January 2016. 

3. A third option envisaged could be that the broadly determined range of the financial instruments of the original Commission proposal is maintained through the use of: (a) minimum zero rates or (b) later dates of entry into force for products, other than shares and identified derivatives.

The entry into force for shares and identified derivatives would be l January 2016.

If minimum Zero rates were introduced, it would allow individual Member States that would like to or already impose taxation for other products that are not included from the beginning of a progressive implementation, doing so.

If later dates of entry into force were introduced, the Directive would provide that individual Member States, that would like to or already impose taxation for other products that are not included from the beginning of a progressive implementation, would be allowed doing so in the meantime.

This Directive would thus impose a common system of financial transactions tax but with a progressive implementation.

Under all above mentioned options, a general review clause could be inserted. This review clause would comprise a post factum-evaluation report carried out by the European Commission, also with the cooperation of other European Institutions, as regards any undesirable effects ofthe tax on taxedproducts possibly followed by a Commission Proposal to remedy the identified issues.

Questions for Member-States:

  1. Member States views on the three options for a progressive implementation are requested.
  2. Member States views on the need for a general review clause to remedy identified issues are requested.
  3. Do Member States identify other procedural options?

Full document


Meanwhile TAX-NEWS explains why Slovenia is considering withdrawing from the list of countries that plan to adopt a Financial Transactions Tax in the European Union, owing to concerns that its base is too narrow. This was confirmed in comments from Slovenia's Prime Minister, Alenka Bratušek, following Slovenia's decision earlier this month not to include its name in a joint concluding statement after a meeting with other participating states on the development of the FTT. They hope that the tax can be phased in progressively from 2016.

Bratušek told Parliament on 19 May 2014, that Slovenia had supported the FTT on the basis that it would apply to a broad tax base, be set at a low rate, and be simple to administer. However, the current proposals are going in the opposite direction, she said. She added that Slovenia currently collects €40 million each year from an existing tax on financial services, and a further €20 million from bank assets. She noted that this is "significantly more" than would be raised by the proposed FTT.

It is thought that the tax will cost Slovenia €2 million to administer, and raise just €3 million. If Slovenia withdraws its support, there would be ten remaining countries in the EU that are working towards creating an FTT zone under provisions for "enhanced cooperation" within the EU: Austria, Belgium, Germany, Estonia, Greece, France, Italy, Portugal, Slovenia, and Spain. In Belgium, the proposals have also be criticized by the Federation of Enterprises, which has called on the Government to pull out of the talks. Under the enhanced cooperation procedure, nine nations must adopt the levy or the proposals must be ditched.

Full article  © Wolters Kluwer TAA Limited



© Presidency of the Council


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