As the deadline for the financial transaction tax agreement draws near, Member State ambassadors to the EU have reportedly been urged to speed up negotiations. The group of 11 EU Member States who agreed in principle to adopt such tax, in order to collect at least partially the large sums they used to bail-out their banks in the first phases of the crisis, set the deadline for December this year. Germany, France and Italy – the main backers, would suffer a substantial blow if a compromise were not ready by then. Although much work has been done on the deal, the Italian presidency of the Council reportedly struggles to reach agreement on some specific and largely technical issues. Questions remain about the inclusion into FTT of transaction concerning non-listed (typically family) companies´ shares, as well as on what derivatives the tax should be applicable – the negotiators asked the ECB to come up with an impact analysis. Also the basic taxation principle is problematic – taxing transaction based on the issuer´s original location is administratively easier, but could prove ineffective as to the amount of tax collected.

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