Ger­many, France push for 0.2% tax on Europe stock trades

Gulf Times Business - - BUSINESS -

Stock buy­ers in Europe would pay a trans­ac­tion tax of at least 0.2% of the pur­chase price un­der a plan set out by Ger­many and France.

The two coun­tries are try­ing to kick-start talks on the tax, which have dragged on for more than seven years, as part of their ef­forts to strengthen the euro area. Their lat­est draft pro­posal holds out the pos­si­bil­ity of di­rect­ing rev­enue from the levy into a euro-area bud­get. Some de­gree of rev­enue shar­ing among par­tic­i­pat­ing coun­tries is also fore­seen, a point that could help sway smaller coun­tries to sign on to the plan.

The Euro­pean Com­mis­sion first pro­posed a fi­nan­cial-trans­ac­tion tax in 2011 to make sure the in­dus­try made a “fair con­tri­bu­tion” after tax­pay­ers bore the costs of the fi­nan­cial cri­sis. When some mem­ber states op­posed the plan, a smaller group sought a com­pro­mise un­der “en­hanced co-op­er­a­tion” rules. Aus­tria, Bel­gium, France, Ger­many, Greece, Italy, Por­tu­gal, Slovakia, Slove­nia and Spain are still at the ta­ble. The new Ger­man-French plan seen by Bloomberg elab­o­rates on a pre­vi­ously an­nounced pro­posal that’s based on an ex­ist­ing levy in France.

Other key points in the pro­posal in­clude: The tax would ap­ply to shares is­sued by com­pa­nies based in one of the par­tic­i­pat­ing coun­tries and whose mar­ket cap­i­tal­i­sa­tion ex­ceeds €1bn ($1.2bn). Mar­ket-mak­ing ac­tiv­i­ties would be ex­empt. In­tra­day trans­ac­tions would also fall out­side the scope of the tax, which would ap­ply only to the “net po­si­tion of an ac­qui­si­tion at the end of the day.” The tax would ap­ply even if the trans­ac­tion oc­curs out­side the EU.

A French Fi­nance Min­istry of­fi­cial con­firmed that the work­ing paper is part of the plan for re­form­ing the euro area un­veiled in June by French Pres­i­dent Em­manuel Macron and Ger­man Chan­cel­lor An­gela Merkel. Tech­ni­cal work is un­der way to move the pro­posal for­ward, the of­fi­cial said.

A spokesper­son for Ger­many’s per­ma­nent rep­re­sen­ta­tion to the Euro­pean Union didn’t im­me­di­ately re­spond to a re­quest for com­ment.

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