22 January 2013

Financial transaction tax: ECOFIN Council agrees to enhanced cooperation

The 11 countries are Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia.

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.

Discussions on a 2011 proposal aimed at introducing an FTT throughout the EU2 received insufficient support within the Council. That proposal involved a harmonised minimum 0.1 per cent tax rate for transactions in all types of financial instruments except derivatives (0.01 per cent rate). The aim was for the financial industry to make a fair contribution to tax revenues, whilst also creating a disincentive for transactions that do not enhance the efficiency of financial markets.

In September and October 2011, the 11 Member States wrote to the Commission requesting a proposal for enhanced cooperation, specifying that the scope and objective of the FTT be based on that of the 2011 proposal.

It is only the third time that an enhanced cooperation has been launched to allow a limited number of Member States to proceed with a particular measure, and the first time in the area of taxation

Requirements for enhanced cooperation are laid down in article 20 of the Treaty on European Union and articles 326 to 334 of the Treaty on the Functioning of the European Union. In particular, it must be established that the objectives cannot be attained within a reasonable period by the EU as a whole. At least nine Member States must participate, and the cooperation must remain open for any others that wish to join.

Press release

ECOFIN Council results, also on tax fraud

Decision

Press conference webcast

"Today was about process, it was about moving the financial transaction tax forward through enhanced cooperation, but it was not about the content or the substance of any financial transaction tax", said Ireland's Finance Minister Michael Noonan after the meeting. "Member States which don't want to participate in the ultimate financial transaction tax  will be fully involved in the process, and will participate fully in the discussions, so it's still a process which will involve the 27 members."

Press release

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