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Businesses Call For Belgium To Drop Out Of FTT

by Ulrika Lomas, Tax-News.com, Brussels

19 May 2014


Belgium should exit the enhanced cooperation procedure for a European Union financial transactions tax (FTT) until major European financial centers participate, or until its impact has been thoroughly studied, the Federation of Enterprises in Belgium (FEB) has said.

The recent commitment by ten EU member states to the phased implementation of an FTT by 2016 is a step in the wrong direction, the FEB said. It said that Belgium shouldn't join, at least until the UK, Switzerland, Luxembourg, and the Netherlands follow suit. The tax, during its first phase will apply to trading in shares and some derivatives, and the federation has warned that it will not curb risky speculation, but will harm the real economy, affecting intra-company financing and liquidity management, the financing of supplementary pensions, and the funding of public debt.

Profound differences of opinion remain among the participating member states because of the huge risk posed by the tax, in particular to small countries such as Belgium, the federation added. It warned that Belgium may lose EUR200m (USD274.5m) in revenue from the domestic tax on stock market operations, which is due to be abolished once the FTT starts, while stock market and financial activities may relocate outside of the FTT zone.

TAGS: tax | pensions | Belgium | Netherlands | speculation | tobin tax | Luxembourg | United Kingdom | Switzerland | European Union (EU) | Europe

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