The Council of the European Union has published a note from the General Secretariat concerning the state of play of the ongoing enhanced cooperation procedure for the introduction of a Financial Transaction Tax (FTT).
According to the note, the participating Member States have indicated that further negotiations on FTT and drafting of a compromise text of the future Directive will be made against the basis of the agreed upon broad lines relating to a number of the building blocks of FTT (the "Core Engine"). As provided in the note, this "Core Engine" includes the following:
II. Tax base for derivatives
III. Scope of derivatives
IV. Market Making (for shares markets)
A reduced minimum rate (80% of normal tax rate) can be applied for market makers bound by a contract with a specific trading venue to carry out market making activities with regard to specific shares, irrespective of whether it is proprietary trading or market making.
V. Taxable event for securities
Taxation of gross transactions.
VI. Transaction chain
Taxation of all transactions in the chain except agents and clearing members (when acting as facilitators) according to Commission proposal.
VII. Real economy and pension funds
Further analysis with regard to real economy and pension funds is required.
Currently, 10 EU Member States are participating in the enhanced cooperation procedure for the FTT: Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovak Republic, Slovenia, and Spain.
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