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EU Financial Transactions Tax In 2016 'Unlikely'

by Ulrika Lomas, Tax-News.com, Brussels

10 December 2014


A group of 11 European Union (EU) countries has failed to reach an agreement on a proposed financial transactions tax before a self-imposed deadline.

It is believed that the so-called EU11 remains divided over the shape of a future financial transactions tax. Ministers met in Brussels on December 8, but negotiators are reported to have said afterwards that an agreement would not be possible by the end of the year.

A document prepared by Italy in advance of the meeting, seen by Reuters, reportedly warned that there was insufficient clarity on how the levy would be collected. It reportedly said "further reflections" on the application of the proposals would be necessary. After the meeting, French Finance Minister Michel Sapin said a fresh attempt will be made in 2015.

In May, 10 of the 11 states that have committed to the introduction of an FTT signed a joint statement setting out their intention to work toward the progressive implementation of the levy. They confirmed that they would focus initially on the taxation of shares and some derivatives. The tax was expected to be in place by January 1, 2016, but this implementation date is now said to be unlikely.

Slovenia was the only jurisdiction not to have put its name to the May statement. Prime Minister Alenka Bratušek later told the Slovenian Parliament that the proposed tax base for the FTT was too narrow. At least nine EU member states must be willing to be involved in an "enhanced cooperative procedure" for the process to be allowed to go ahead.

TAGS: Finance | tax | investment | business | Belgium | Portugal | Slovenia | Estonia | Slovakia | Austria | Germany | Greece | Italy | Spain | tax reform | European Union (EU) | business investment | Europe | Tax | Financial Transactions Tax (FTT)

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