Financial transaction tax (FTT)

In “An Economy that Works for People”

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In February 2013, the European Commission tabled a proposal aimed at introducing a Financial Transaction Tax (FTT). Negotiations are taking place through the so-called 'enhanced cooperation' procedure' with 10 Member States. The participating countries were initially Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. Estonia withdrew its participation in March 2016.

The proposal has the same scope and objectives as the Commission's initial proposal for an EU-wide FTT. It involves a minimum 0.1 % tax rate for transactions in all types of financial instruments, except for derivatives which would be subject to a minimum 0.01 % tax rate in the participating countries of the enhanced cooperation.

The adoption of the directive requires unanimous agreement of the participating countries (within the Council), after consulting the European Parliament and the European Economic and Social Committee.

The participating countries have regularly held meetings on the proposal, but the issue has remained so far at a standstill in Council.

In June 2023, the Commission stated that 'the prospects of reaching an agreement' [on the FTT] in the future were 'limited' adding there was 'little expectation that any proposal would be agreed in the short term.'        

References:

Author: Pieter Baert, Members' Research Service, legislative-train@europarl.europa.eu

As of 20/06/2024.