State of play: Negotiations on introducing the Financial Transaction Tax
11 resp. 10 EU Member States have been negotiating the introduction of a Financial Transaction Tax (FTT) for more than three years. On several occasions, the coalition of 10 countries, which includes Belgium, Germany, France, Greece, Italy, Austria, Portugal, Slovakia, Slovenia and Spain, announced the imminent agreement on the FTT, most recently for December 2016. However, the negotiations are once again delayed. A finalisation has now been scheduled for 2017. In addition, the concern persists that the Finance Minister might quietly bury the FTT.
Which transactions will be covered by the Financial Transaction Tax?
According to the stage of the negotiations as at the end of 2016, derivatives, swaps and futures, apart from shares and bonds, shall be subject to the tax. According to the latest information, a tax rate of 0.1 % has been planned for shares and bonds, and 0.01 % of the value of the papers in the case of derivatives. Certain derivative transactions (such as so-called repos, repurchase agreements as well as transactions of Debt Management Agencies) are exempt from the tax. Not yet resolved are questions concerning the effect on pension funds and real economy, which are currently being analysed.
How much money could be generated by the FTT?
In the original legislative proposal on the Financial Transaction Tax from 2013, the European Commission assumed an amount of 57 billion € for 11 Member States. According to the latest information, due to exemptions and the fact that one Member State has withdrawn from the negotiations, the expected revenue will be significantly lower.
When will the Financial Transaction Tax be introduced?
It is not yet clear when the Financial Transaction Tax will be implemented in the 10 participating EU Member States. However, it seems to be unlikely that it will be introduced before 1st January 2018.
The fact that the negotiations have come so far, is above all thanks to the engagement of hundreds of thousands of people, who participated in petitions for introducing a Financial Transaction Tax, such as the one by financialtransactiontax.eu.
Due to the mobilisation of as many supporters for the introduction of a Financial Transaction Tax as possible and the 10 willing EU Member States, who entered into concrete negotiations, it has been possible to achieve the main objectives of the campaign by financialtransactiontax.eu. Hence, we will probably no longer update the homepage.
However, we would like to make you aware of the new campaign No to Tax Havens against tax havens and for tax justice, which among other will report on the progress of the negotiations on the Financial Transaction Tax!