13 November 2012

Commissioner Šemeta: Statement on Financial Transaction Tax and Savings at ECOFIN Council

Šemeta said that it was important to move forward quickly on the FTT file, given the benefits that it offers. Analysis showed that enhanced cooperation on the FTT would significantly reduce the fragmentation of - as well as strengthen - the Internal Market.

"After it was determined that agreement at 27 would not be possible on the Commission proposal for an FTT, I received letters from 11 Member States for the launch of an enhanced cooperation procedure. The requests clearly specify that the objectives and scope of the initiative should be based on the Commission's initial proposal.

We have carefully analysed the extent to which those requests comply with the conditions foreseen in the Treaty. The answer is definitively positive: they do. Accordingly, we tabled this proposal for a Council Decision to authorise enhanced cooperation on FTT.

There is no question that going ahead with FTT through enhanced cooperation is fully justified, but also strongly grounded and legally compliant. Our analysis showed that enhanced cooperation on the FTT will not undermine the Internal Market. On the contrary, it will significantly reduce its fragmentation and will strengthen it. No evidence – economic or otherwise – was found that challenged this conclusion.

This stage of the procedure is about allowing the 11 Member States to go ahead with an FTT in the context of Treaty provisions - as opposed to inter-governmental cooperation - while, of course, respecting EU law. In this context, it is important to understand that the alternative to enhanced cooperation is not the absence of financial sector taxation. It is the implementation of 11 different national forms of FTT instead of a single one. So for everyone in the Single Market, a common approach – even if not at 27 – is preferable to a patchwork approach, to avoid complexity and added burden for businesses and investors."

---

Savings Tax

"It is now 16 months since the Commission proposed this mandate to open negotiations with Switzerland and 4 other third countries on savings taxation. This is a proposal which could ultimately allow us to make great head-way in reducing the serious problem of tax evasion. And yet, here we still are…discussing. It is very disappointing that we are still stuck at this point.

Against this background, let me make two remarks. First, no one can understand this delay. We are not talking of a major EU initiative here. We are talking about giving the Commission a chance to discuss ways to improve the fight against tax fraud and evasion with international partners. Agreeing to launch negotiations does not in any way pre-empt the end result of these talks. I have already, many times, reassured Austria and Luxembourg that they can oppose the outcome of the negotiations if they consider it to go against their interests. They should have no concerns about that.

Second, I fail to understand the arguments which are being used to oppose progress. If some Member States want to maintain bank secrecy domestically, for their own residents, that's their choice. Our discussions do not put this into question. But this argument doesn’t fly when it comes to taxing non-residents. The EU approach does not impose anything on Austrian or Luxembourger residents. It only allows the other 25 Member States to ensure the fair taxation of their own residents, according their national rules. Looking for equivalence in treatment from Switzerland is our common endeavour. And Luxembourg and Austria should know that the negotiations are about ensuring a better savings system, not about targeting them.

To conclude, let me remind you that, on three separate occasions this year, EU leaders have called for "rapid" progress on this file. The European Council fully recognises its significance in the fight against tax fraud and evasion. It’s now up to you, the Finance Ministers, to deliver on this demand."

Full statement

© European Commission