17 February 2012

Commissioner Šemeta: The FTT is not an attack on the City of London

Šemeta also presented the following key ideas:

• "US authorities amended their implementation guidelines for the Foreign Account Tax Compliance Act (FATCA). This US legislation is an important tool for fighting tax evasion.
• But in its original form it would have crippled EU businesses with administrative burdens, compliance costs and legal difficulties.
• Thanks to a coordinated approach by the Commission and a number of Member States – including the UK – we could persuade the USA to go for a less burdensome but just as effective approach to applying FATCA in Europe.
• The financial industry, in particular, will benefit, as they will be spared billions of dollars through the "government-to-government" exchange of information that has been agreed.
• This is a prime example of how the EU offers Member States a strength in numbers in our negotiations with international partners.
• London is not the centre of the financial world because of tax breaks. It is because of the infrastructure, people and economies of scale that you offer. With Greenwich situated in London, you even have time-zones on your side!
• Of course the financial sector will have to adapt to the tax and readjust some of its practices, notably in the field of high frequency trading. But I'm sure I don't need to convince you of your own capacity to adjust quickly to a new situation!
• It may surprise you to hear it, but London – and the UK as a whole – has a lot to gain from an EU FTT.
• The FTT is a first step to re-building citizens' confidence in the financial sector, by showing that the sector is making a fair contribution to public finances and the costs of recovery.
• In the UK alone, this tax is expected to generate no less than €10 billion (£8.4 billion) a year. This is a significant amount, which can be put to good use consolidating finances, investing in growth-promoting activities or contributing to global challenges like development and climate change."

Full speech

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