According to recent reports, some progress is being made on the initiative for the introduction of a Transactions Tax (FTT) in the EU. The FTT has been pursued by a number of EU Member States through the enhanced cooperation procedure following the European Council's inability to reach unanimity on an FTT proposal in 2012. Currently, 10 Member States are taking part in negotiations with the focus shifting to the introduction of an FTT based on the existing FTT in France, which primarily applies to transactions involving shares in companies headquartered in France with a market capitalization exceeding one billion euros. The French FTT rate is currently 0.3%, with a similar rate being considered by the participating Member States.
One of the main issues that remains, especially for smaller Member States, is that the amount of tax revenue that could be obtained from such an FTT may not be sufficient to offset the cost of actually implementing the FTT. To address this, a revenue pooling mechanism is being considered that would be used to reduce the participating Member States' contributions to the EU budget, with larger Member States compensating smaller Member States through a calculation based on GDP.
Further discussion on the FTT at the level of the EU Economic and Financial Affairs Council is to take place on 17 May 2019.
Member States participating in the enhanced cooperation procedure for the FTT include Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain.
We’re here to answer any questions you have about the Orbitax products and services.
We’re committed to providing high value, low cost tax research and management solutions.
Our Twitter account is where you can find latest information, news updates, offers and lots more.