EU Member States and the EC to methodically evaluate the economic impact of the financial transaction tax.In the presidency’s view, a step-by-step approach, potentially structured on the basis of a review clause, would allow: The approach suggested by the presidency would be to allow for gradual implementation of the tax based on the models developed and already tested by France and Italy, where unilateral financial transaction taxes have been introduced. In an attempt to move the file forward, the Portuguese presidency of the EU Council recently proposed an inclusive discussion on tax design issues of the financial transaction tax at the EU level. In the meantime, several EU Member States (France, Italy, and Spain) have introduced unilateral financial transaction taxes. In parallel, the financial transaction tax was mentioned as a possible new EU resource as part of the EU’s long-term budget, whereby the European Commission committed to put forward a proposal by June 2024. The revised proposal included an optional exemption for pension schemes and a new system for mutualization of the financial transaction tax revenues. The most recent significant development came in the form of a proposal from the German Finance Minister in December 2019, for a revised financial transaction tax directive to be adopted by the 10 remaining states under enhanced cooperation. Since then, work on the file in the EU Council working groups has been ongoing, despite Estonia’s withdrawal from the group. Taxation of the financial sector has been under discussion at the EU level since 2011, when the European Commission first proposed implementing a financial transactions tax (FTT) at EU level.Īfter initial discussions, it became apparent that unanimous support among EU Member States did not exist, and 11 EU Member States decided to move ahead with the initiative under the so-called enhanced cooperation procedure.

Financial transaction