EU-10 agree on par­tial FTT, EPP wants global deal

Financial Mirror (Cyprus) - - FRONT PAGE -

Ten euro zone coun­tries agreed on Tues­day on some as­pects of a har­monised tax on fi­nan­cial trans­ac­tions - and gave them­selves un­til the mid­dle of next year to reach agree­ment on re­main­ing is­sues, in­clud­ing tax rates, the group said in a state­ment.

A fi­nan­cial-trans­ac­tion tax (FTT) is in­tended to re­cover some of the pub­lic money used to sup­port banks, to curb spec­u­la­tive trad­ing and to unify the var­i­ous levies al­ready charged in sev­eral EU coun­tries.

The EPP Group’s ne­go­tia­tor on the Euro­pean FTT, Oth­mar Karas, wel­comed the agree­ment. “This is rea­son­able and an over­due po­lit­i­cal sig­nal. Un­for­tu­nately this is just the fourth best op­tion: this is just the low­est com­mon de­nom­i­na­tor, fur­ther steps must fol­low,” the Aus­trian MEP said af­ter the agree­ment.

Talks on im­pos­ing one have been drag­ging on since 2011. In Septem­ber of this year, min­is­ters from Ger­many, France, Italy, Aus­tria, Bel­gium, Es­to­nia, Greece, Por­tu­gal, Slo­vakia, Slove­nia and Spain said they had made progress and they ex­pected a po­lit­i­cal agree­ment in De­cem­ber.

Es­to­nia, which did not sign the agree­ment, had been wor­ried that be­cause most of the shares traded by its fi­nan­cial in­sti­tu­tions are is­sued out­side the par­tic­i­pat­ing group, it would hardly get any rev­enue. At the same time, its traders would have an in­cen­tive to move their busi­ness else­where.

The joint state­ment by the ten said all share trans­ac­tions, in­clud­ing in­tra­day trad­ing, would be taxed.

The tax would be paid by traders in one of the coun­tries par­tic­i­pat­ing in the scheme on shares is­sued in those coun­tries.

“In or­der to sus­tain liq­uid­ity in illiq­uid mar­ket con­fig­u­ra­tions, a nar­row mar­ket-making ex­emp­tion might be re­quired,” said the state­ment. France had in­sisted on such an ex­emp­tion.

The min­is­ters said they would an­a­lyse whether it would be bet­ter to tax all shares, re­gard­less of where they were is­sued.

The min­is­ters also agreed that de­riv­a­tives trans­ac­tions should be taxed “on the prin­ci­ple of the widest pos­si­ble base and low rates and it should not im­pact the cost of sov­er­eign bor­row­ing.”

They said op­tion-type de­riv­a­tives should be taxed on the op­tion pre­mium. For other types of de­riv­a­tives, the tax­able base could be a ter­mad­justed or non-term-ad­justed no­tional amount, de­pend­ing on whether the in­stru­ment has a ma­tu­rity date.

They also agreed to fur­ther an­a­lyse the im­pact of the tax on the real econ­omy and pen­sion schemes as well as the fi­nan­cial vi­a­bil­ity of the tax for each coun­try.

“On the ba­sis of th­ese fea­tures, in or­der to pre­pare the next step, ex­perts in close co­op­er­a­tion with the Com­mis­sion should elab­o­rate ad­e­quate tax rates for the dif­fer­ent vari­ants,” the state­ment said.

The pro­posal of the Euro­pean Com­mis­sion from 2013 en­vis­aged a tax rate of 0.1% on share and bond trades and 0.01% on de­riv­a­tives trades. The FTT would have to be paid if at least one of the par­ties is based in the EU.

The longterm Karas - must be trans­ac­tions tax.

“The best would have been to in­clude all global fi­nan­cial cen­tres. The sec­ond op­tion was an EU-wide FTT, the third op­tion was of the Eu­ro­zone. I re­main op­ti­mistic,” Karas goal - to get ac­cord­ing

a global to MEP fi­nan­cial joint ac­tion stressed.

“The pur­pose of the FTT is not to be an­other cash cow, but to have a reg­u­la­tory ef­fect. Risky and un­trans­par­ent busi­ness prac­tices should be taxed more,” he said.

In 2012 and 2013 the Euro­pean Par­lia­ment voted by an over­whelm­ing ma­jor­ity in favour of the swift in­tro­duc­tion of an EU-wide FTT.

In De­cem­ber 2013 Par­lia­ment gave its con­sent to only 11 mem­ber states go­ing ahead with the tax (533 votes in favour, 91 against and 32 ab­sten­tions).

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.