22/01/2013 - Economic and Financial Affairs Council (ECOFIN)
The EU launches enhanced cooperation on the financial transaction tax
On 22 January 2013, the Ecofin Council adopted a decision authorising eleven member states to go ahead with enhanced cooperation on a financial transaction tax (FTT).
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"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."
In Summer 2012, it became clear that there was insufficient support for the introduction of a financial transaction tax throughout the EU. Since then, eleven member states have requested the Commission to present a proposal for enhanced cooperation on an FTT, specifying its scope and objective along the lines of the Commission's original proposal. The Commission could put forward a new proposal as early as February.
Enhanced cooperation can be launched at the request of at least nine member states. The eleven member states wishing to introduce a financial transaction tax through enhanced cooperation are Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. Any other member state may join the enhanced cooperation, if they so wish.
The Commission's original proposal involved a harmonised minimum 0.1% tax rate for transactions in all types of financial instruments except derivatives (0.01% rate). The aim was for the financial industry, which many consider to be under-taxed, to make a fair contribution to tax revenues, whilst also discouraging transactions that do not enhance the efficiency of financial markets.