Proposal for a Council Decision authorising enhanced cooperation in the area of financial transaction tax

On 28 September 2011, the Commission adopted a proposal for a Council Directive on a common system of financial transaction tax (FTT) and amending Directive 2008/7/EC. The proposal aimed at

– harmonising legislation concerning indirect taxation on financial transactions, which is needed to ensure the proper functioning of the internal market for transactions in financial instruments and to avoid distortion of competition between financial instruments, actors and market places across the European Union, and at the same time

– ensuring that financial institutions make a fair and substantial contribution to covering the costs of the recent crisis and creating a level playing field with other sectors from a taxation point of view, and

– creating appropriate disincentives for transactions that do not enhance the efficiency of financial markets thereby complementing regulatory measures to avoid future crises.

The proposal and variants thereof were extensively discussed in the meetings of the Council, which started under the Polish Presidency and continued at an accelerated pace under the Danish Presidency, but failed to get the required unanimous support because of fundamental and un-bridgeable differences amongst Member States.

At the Council meetings of 22 June and 10 July 2012, it was ascertained that essential differences in opinion persist as regards the need to establish a common system of FTT at EU level and that the principle of harmonised tax on financial transactions will not receive unanimous support within the Council in the foreseeable future. It follows that the objectives of a common system of FTT, as discussed in Council upon the Commission's initial proposal, cannot be attained within a reasonable period by the Union as a whole.

In these circumstances, ten Member States (Belgium, Germany, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia) have addressed formal requests to the Commission by letters received between 28 September and 22 October 2012 indicating that they wish to establish enhanced cooperation between themselves in the area of the establishment of a common system of FTT and that the Commission should submit a proposal to the Council to that end.

This proposal for a Council Decision authorising enhanced cooperation in the area of FTT is the Commission's response to these requests.

• Primary Source

EUR-Lex: COM(2012)631: Follow the progress of this document through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2012:631:FIN

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