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EU Tax Commissioner Talks FTT

by Ulrika Lomas, Tax-News.com, Brussels

14 December 2012


Enhanced cooperation on plans for a European Union (EU) financial transactions tax (FTT) will allow for "a coordinated and open approach to financial sector taxation," Tax Commissioner Algirdas Šemeta has said.

Enhanced cooperation offers a system whereby EU member states wishing to work more closely together can do so, while respecting the legal framework of the Union. In principle, at least nine states must be involved in enhanced cooperation, but it remains open to any state that wishes to participate.

The European Commission gave the go ahead for enhanced cooperation on the FTT in October, based on a request by eleven member states. The Commission said at the time that the states that wish to apply an EU FTT through enhanced cooperation should be allowed to do so. According to the Commission, enhanced cooperation on the FTT would not only bring "immediate, tangible advantages" for those countries that participate, but would also contribute to a better functioning Single Market for the Union as a whole.

Šemeta has now reiterated the Commission's stance in a statement to a European Parliament plenary discussion. Šemeta said that pursuing enhanced cooperation "is strongly grounded, legally justified within the Treaties' framework and desirable in the current economic and social context." Enhanced cooperation would pave the way for "a coordinated and open approach to financial sector taxation," and Šemeta hopes that it could eventually be expanded beyond the initial group of eleven member states.

Under EU treaty provisions, a discussion on the substantive FTT proposal to be implemented between the eleven member states can follow once the Commission's authorization of enhanced cooperation is formalized. As requested by participating member states, the FTT will be based on the scope and objectives of the initial Commission proposal of 2011.

Šemeta argues that an FTT "is all about fairness and efficiency," and will enable member states to make sure that the financial sector makes a "fair contribution to public finances." Further, he believes that the FTT will "harmonize existing and possible future FTTs, avoiding the proliferation of cumbersome national systems which result in fragmenting the Single Market."

TAGS: tax | investment | European Commission | banking | financial services | capital markets | tobin tax | European Union (EU) | services | Europe

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