Taxation of the financial sector
The financial sector was a major cause of the crisis and received substantial government support over the past few years. To ensure that the sector makes a fair and substantial contribution to public finances and for the benefit of citizens, enterprises and Member States, the European Commission is following up on its original proposal for a financial transaction tax (FTT) made on 28 September 2011.
The Financial Transaction Tax (FTT)
On 14 February 2013 the European Commission adopted a proposal for a Council Directive implementing enhanced cooperation in the area of financial transaction tax, which mirrors the scope and objectives of its original FTT proposal of September 2011. This follows the decision of the Council on 22 January 2013 to authorise enhanced cooperation between 11 Member States and the consent of the European Parliament given on 12 December 2012, For further information see the press release (IP/13/115) the questions and answers (MEMO/13/98) and the proposal (COM/2013/71 ). See also the impact assessment (SWD/2013/28 ) and its summary (SWD/2013/29 ), as well as the presentation.Through the FTT, the financial sector will properly participate in the cost of re-building the economies and bolstering the public finances of the participating Member States. The proposed Directive will reduce the number of divergent national tax regimes in the EU, will generate significant revenues and help to ensure greater stability of financial markets, without posing undue risk to EU competitiveness.
During the Ecofin Council meetings in June and July 2012 it was ascertained that there was no unanimous support within the Council for a common system of FTT in the Union as a whole, as proposed by the Commission, in the foreseeable future. During these Ecofin meetings several delegations had already pointed out that progress could be made on the issue in a more restricted group of Member States in the context of enhanced cooperation between interested Member States.
As from 28 September 2012 the Commission received requests of eleven Member States asking it to submit a proposal for a Council Decision to authorise enhanced cooperation. Its objectives and scope were requested to be based on the original Commission FTT proposal. The Commission's analysis provided a positive outcome. On 23 October 2012 the Commission proposed to the Council to authorise the enhanced cooperation in the area of financial transaction tax. The European Parliament gave its consentto the latter proposal on 12 December 2012 and on 22 January 2013 the EU Council adopted a decision authorising eleven Member States to go ahead with enhanced cooperation on a common system of financial transaction tax (FTT). See the Council press release, Commissioner Šemeta's statement and his speechat the Council press conference. A subsequent Commission proposal for a Council Directive implementing the enhanced cooperation in the area of financial transaction tax should follow in due course. See the press release (IP/12/1138), the questions and answers (MEMO/12/799) and the proposal (COM/2012/631 ). See also Commissioner Šemeta's statement after the European Parliament vote.
On 28 September 2011 the European Commission has adopted a proposal for a Council directive on a common system of financial transaction tax and amending Directive 2008/7/EC. For further information see the press release (IP/11/1085 ), the frequently asked questions (MEMO/11/640 ), the Commission proposal (COM/2011/594 ), the impact assessment (SEC/2011/1102), its summary (SEC/2011/1103) and the citizens' summary as well as a presentation .
European Commission services on 4 May 2012 published seven explanatory notes that provide the results of further analysis and clarifications on how the FTT would work in practice:
- Tax contribution of the financial sector;
- Territoriality of the tax;
- Revenue estimates;
- Macroeconomic effects;
- Tax collection;
- Pension funds.
|The Financial Transaction Tax explained: a video interview of Manfred Bergmann, Director for Indirect Taxation and Tax Administration, European Commission|
On 7 October 2010 the Commission published a communication (COM/2010/549 ) setting out ideas for the future taxation of the financial sector. This was followed on 22 February 2011 by the launch of a public consultation on the taxation of the financial sector, aimed to receive as wide as possible feedback on the ideas set out in the Communication. The results of the consultation are available from our website.
In parallel, the Commission has explored ways to introduce a financial transaction tax at global level since 2009 with its international partners in the G20 (Pittsburgh, Toronto) and will continue to do so.
On 29 June 2011, the Commission announced in the context of the multiannual financial framework that it would propose to set up a financial transaction tax as the basis for an own resource for the EU budget (IP/11/799 , MEMO/11/468 ). After the adoption of the proposal for a directive on the Financial Transaction Tax in September 2011, the Commission proceeded to update its legislative proposals relating to the Own Resources System in November 2011.All relevant documents on this issue are available from the Budget website(see COM/2011/738, 739 and 740).