13th December 2015

Ten EU states go forward with FTT

On Tuesday 8 December, representatives of 10 EU member states signed a document clarifying the way forward for the almost-forgotten Financial Transaction Tax. This tax was proposed during the financial crisis and its aim was to symbolically recover at least partially costs used to support financial institutions that needed to be bailed out. When some countries refused to take part, a group of 11 decided to proceed under the Enhanced Cooperation mode. Now, Estonia dropped out of the group – meaning only 10 continue the preparatory work. According to the document, the final deal should be made mid-next year. All transactions with shares issued in the participating states and traded by an institution based in one of the participating states would be taxed, with a single exception of narrow market-making. Further talks would concentrate on the possibility to tax all shares, wherever they were issued. Derivatives would be taxed based on two principles – widest possible base and low rate. Also, the taxing of derivatives must not bring about increased costs of sovereign borrowing. Further impact analyses will also be carried out. Based on these, the states and the Commission will determine tax rates to be applied to shares and derivatives (the original proposal was 0.1% and 0.01% respectively).

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Members of the American Chamber of Commerce in the Czech Republic