The European Commissioner for taxation Algirdas Semeta says efforts to introduce a financial transaction tax should be focused on getting all 27 EU member states on board, according to reports.
In September, the European Commission proposed imposing a tax of 0.1 per cent on the buying and selling of bonds and shares and a tax of 0.01 per cent on the buying and selling of derivatives. The UK Government has said it will not support an EU wide FTT, describing it as a tax on pensions.
The Wall Street Journal reports that Semeta believes the EU “is moving in the direction of political compromise in order to achieve consensus” between all 27 member states over the tax.
Speaking to member state representatives in Copenhagen yesterday, he said: “Some are already asking whether we should look for alternative routes to agreement, by moving ahead at less than 27. I say that the time is not ripe for such a move.”
France has already said it will introduce a unilateral FTT of 0.1 per cent on some financial transactions. German Chancellor Angela Merkel has suggested the EU FTT could be moved more in line with UK share stamp duty, charged at a flat rate of 0.5 per cent, to try and achieve consensus on the proposal.
If that consensus is not achievable, EU “enhanced cooperation” rules mean that those member states which do want to sign up to the tax can do so without all 27 states agreeing. But, the tax will not apply in those countries who refuse to back the pact.
Critics have said companies will relocate to avoid the FTT and that pension savers or other mutual fund investors would bear the brunt of the tax.
Chancellor George Osborne has refused to back an EU wide FTT, claiming it would push down revenue from other taxes like corporation tax. The UK Government says it supports the idea of an FTT but only if it is implemented globally.