The introduction of the EU Financial Transaction Tax (FTT or Tobin Tax by reference to the Nobel Prize-winner economist) has been largely debated since the beginning of the 2008 crisis. Following the ECOFIN meeting held on 22 January 2013, the EU Commission finally approved the introduction of an FTT amongst a subset of EU Member States under the enhanced cooperation procedure. The FTT Directive Proposal was finally launched by the Commission on 14 February 2013.
Given the difficulty faced in achieving a common agreement between the 27 Member States under the first FTT Directive Proposal, a subset of EU countries decided to go ahead and support the introduction of the FTT through the enhanced cooperation procedure. As expected, a Qualifying Majority was reached at the EU Council and a decision authorising the “enhanced cooperation” procedure was agreed. Nonetheless, some Non-Participating Member States remained critical as to the procedure agreed for the FTT implementation.
On 18 April 2013, the UK government lodged a formal legal claim at the ECJ against the introduction of the EU FTT under the “enhance cooperation” scheme based on the existence of extraterritorial effects which are contrary to national prerogatives in tax matters. In this context, Luxembourg has publicly manifested its support for the claim but it is yet to be seen whether further action will be adopted by the Grand-Duchy.
As of today, 11 Member States (the “Participating Member States”), have agreed to the “enhanced cooperation” FTT scheme, namely: Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain. The Netherlands has stated that it may, under certain conditions, be interested in joining the Participating Member States (e.g. exemption for pension funds).
In favor of the enhanced co-operation for an EU FTT
Please, click on the countries of the map to get the contacts of our local FTT experts.
Austria | Belgium | Czech Republic | Denmark | Finland | Estonia | France | Germany | Greece | Ireland | Italy | Luxembourg | Netherlands | Portugal | Slovakia | Slovenia | Spain | Sweden | Switzerland | Russia | United Kingdom
Even though, the FTT Directive Proposal is largely based on the original draft directive published on 28 September 2011, some amendments have been introduced in matters such as:
For more information please refer to the FTT newsletter dated 14 February 2013.
Aside the initiative of the EU Commission, several Member States across Europe have started to introduce or plan to introduce in their domestic legislations a transaction tax unilaterally, e.g. :
For further details, please refer to our local FTT newsletters.
Even if Luxembourg is not part of the enhanced cooperation agreement, its financial services industry will be impacted directly or indirectly. It is therefore crucial that all Luxembourg players stay abreast of the latest EU developments and understand the basics of the new proposal as it currently stands.
Deloitte has developed a network of FTT experts across Europe to share their technical and industry experience and knowledge, but also to be in a position to assist efficiently financial institutions on a cross-border basis.
Our team is composed of both tax and consulting experts who will be able to assist you in assessing the impact of the tax on your business, in understanding the systems and processes changes required to identify taxable transactions and fulfil all reporting and payment requirements.