Rösler Eyes Stock Market Tax As EU Option

by Ulrika Lomas, Tax-News.com, Brussels

23 January 2012

German Economy Minister and leader of the ruling Free Democratic Party (FDP) Philipp Rösler has recently put forward the idea of introducing a European Union (EU) stock market sales tax, based on the existing UK model, as an alternative to the controversial financial transactions tax, currently dividing opinion within the coalition, and indeed within Europe.

Underlining the need for the financial sector to contribute to the cost of the crisis, and determined to gain support for any plans from the British government, Rösler suggested that the UK and Europe examine the idea of a stock market tax, as currently imposed by London.

In the UK, a Stamp Duty Reserve Tax (SDRT) is currently imposed on paperless (electronic) share transactions at a flat rate of 0.5%. In 2006, the UK government generated additional income from the tax of around GBP3.8bn (EUR4.6bn) (USD5.9bn).

Defending his proposal, the FDP leader stressed that if the UK is not prepared to consider the idea of a European financial transactions tax, then it makes sense to discuss an alternative. It is in Germany’s interests, to have the UK on board with any plans, Rösler insisted, warning that a financial transactions tax introduced at eurozone level would merely lead to competitive disadvantages for Frankfurt, and result in an increased burden on customers.

Despite opposition from the FDP, German Chancellor Angela Merkel is determined to press ahead with France on plans for a transactions tax, based on the European Commission’s September proposal.

France and Germany aim to unveil the outlines of a concrete proposal ahead of the forthcoming EU summit meeting in Brussels at the end of January.

Provoking outrage among the FDP leadership, who will only back an EU levy in order to protect the German financial centre, Chancellor Merkel confirmed recently that on a personal level she could envisage the tax introduced just at euro zone level.

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