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UK, Sweden attack FTT statement by euro nations

Spain's De Guindos and Sweden's Borg. ECOFIN, 6 May. [EU Council]

Spain’s De Guindos and Sweden’s Borg. ECOFIN, 6 May. [EU Council]

The United Kingdom and Sweden attacked the bloc of EU nations pressing ahead with a Financial Transaction Tax (FTT) after the group announced plans for the levy at Tuesday’s (6 May) meeting of European finance ministers in Brussels.

France, Germany, Austria, Belgium, Estonia, Greece, Italy, Portugal, Slovakia and Spain said a tax on shares and some derivatives would be implemented in their countries by 1 January 2016 at the latest.  Slovenia, the 11th member of the bloc, did not sign the joint statement, as the country is currently without a government.

“Viable solutions” to achieve an FTT, which would be broadened out overtime to cover more derivatives, must be finalised by the end of the year, they said. Participating member states could impose taxes on products not covered from the first step to maintain their existing taxes.  Italy, for example, already taxes several kinds of derivatives.

It made no mention on where the tax would be paid. The European Commission’s original 2011 proposal suggested a tax where two countries would collect on a transaction if it was cross border. This could now force a non-FTT state to collect revenue on behalf of a participating one.

At the meeting, Sweden has also blocked a compromise to close a tax loophole on hybrid loan arrangements over fears it could hurt a certain type of Swedish investment company, a model used by leading businesses such as Volvo and Eriksson.

Osborne

UK Chancellor George Osborne said: “We will see the detail, but we will not hesitate to challenge a Financial Transaction Tax that damages the UK, other member states or the single market.”

“It is up to member states if they want to damage jobs and investment in their own member state, but it they want to damage jobs and investment in others, we are entitled to challenge that.”

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

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