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UK legal challenge rebuffed as euro nations prepare FTT statement

European Court of Justice. Luxembourg, 2006. [Cédric Puisney/Flickr]

European Court of Justice. Luxembourg, 2006. [Cédric Puisney/Flickr]

The European Court of Justice Wednesday (30 April) threw out the United Kingdom’s controversial legal challenge against the bloc of euro area nations pressing ahead with a Financial Transaction Tax.

ECJ judges refused to block a tax that had not yet been agreed on. The 11 member states, Germany, France, Spain, Italy, Belgium, Austria, Portugal, Greece, Estonia, Slovakia, Slovenia who are pressing ahead with the FTT through enhanced co-operation, are yet to agree the details of their version of the levy.

Enhanced cooperation is a legal mechanism which allows a group of at least nine nations to pass European laws applicable only among themselves, thereby circumventing the need for unanimity among member states. EU tax law requires unanimity which the European Commission’s original proposal for an EU-wide levy was unable to achieve.

A declaration by the bloc on the future form of the tax is expected at the ECOFIN meeting of finance ministers on 6 May or at the Eurogroup meeting of euro area nations the evening.

EurActiv understands it will be a statement of intent to introduce a bloc-wide tax on shares and some derivatives, with a widening scope over different types of derivatives, introduced on a step-by-step basis over a set timeline.

The ECJ said, “The court finds that the contested decision does no more than authorise the establishment of enhanced co-operation, but does not contain any substantive element on the FTT itself.”

The UK expected the ECJ to rule against them, but wanted to set the legal groundwork for a future challenge on the FTT directive. It also did not want to risk that any future challenge was ruled out of time.

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This entry was posted on November 4, 2014 by in Financial services, Journalism, Tax, UK politics and tagged , , , , , , .

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