Financial trading tax would be applied by Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.
Together, these 11 EU countries are to introduce a new financial transaction tax. At their request, the Commission is setting out a common approach to collecting the tax.
The tax aims to ensure the financial industry makes a fair contribution to the public purse. The sector currently pays fewer taxes compared to other sectors.
It would also be a way to make banks and other financial services companies pay their fair share of the cost of recovering from the crisis. They were a major cause of the economic downturn and received substantial government support to help them survive.
The tax would cover all financial transactions involving a party located in one or more of the 11 countries. The minimum rate would be 0.01% for derivatives, and 0.1% for every other transaction, including purchases of shares and bonds. Participating countries are free to apply a higher rate.
The tax would not be applied to everyday financial activities by people and businesses – such as getting insured, taking out a mortgage, credit card purchases and business lending.
The estimated revenue from the tax is €30-35 billion a year. Some of that could go to the EU’s budget. Each participating country’s contribution would be reduced by the same amount.
The rest of the tax revenues would go to national budgets, to be used like other tax revenues – to reduce debt or invest in growth and jobs, for example.
Of the 27 EU countries, 16 will not apply the tax immediately. But they can join the scheme later and, through the EU, have given the go-ahead for the 11 to introduce it.
Detailed discussion will now be held on how to apply the tax. All EU countries can take part in the talks, but only the 11 will be able to vote, and must agree unanimously before it can be implemented – planned for 1 January 2014. The European Parliament will also be consulted.