Algirdas Å emeta, the EU Commissioner responsible for Taxation and Customs Union, Audit and Anti-fraud, has announced that 11 member states have agreed on harmonized Financial Transaction tax. The commissioner recognized that it is a “milestone for EU tax policy, as it paves the way for more ambitious Member States to progress on a tax file, even when unanimity could not be achieved.”
The tax will see France, Germany, Spain, Italy, Belgium, Spain, Austria, Slovenia, Slovakia, Greece and Estonia charge any trade in shares or bonds in 0.1% of their value and 0.01% of any financial derivative contract. The tax is not being adopted in the UK, as the country already charges 0.5% stamp duty on trading in shares, according to a 2011 proposal. The Commission will now make a proposal defining the substance of the enhanced cooperation, which will have to be adopted by unanimous agreement of the participating member states.
The tax does represent an enormous step towards tax harmonization in the Union and shows an unprecedented level of cooperation between members in this area. The eleven members committing to this tax represent two thirds of the EU’s GDP, which will naturally play a role in persuading more members to cooperate.
Algirdas Å emeta seemed very confident about the domino effect of this agreement. “It should be remembered that, under enhanced cooperation, other Member States can sign up at any time. Some have already expressed potential interest in doing so. And I would encourage any Member State that is considering the FTT to climb on board. Because there is everything to gain from being part of an EU approach to the financial transactions tax,” he said in his speech.
Now, it’s up to the Commissioner to get the process going. “ I will present the substantive proposal on the FTT within the next few weeks – drawing largely on our original proposal, as has been requested of us. It will then be for these 11 Member States to take the reins, and discuss and agree this FTT they want to implement,” Å emeta explained.