With France calling for exemptions, and Germany’s finance minister Wolfgang Schaueble admitting that negotiations are still at an early stage, the 1 January 2014 deadline by which all 11 countries participating in the FTT must agree the Directive and adopt any necessary implementing legislation is beginning to look increasingly optimistic.
The details of the FTT were discussed in the February edition of our E-zine and were set out in a proposal adopted by the Commission on 14 February 2013. As proposed, transactions with an established link to the FTT-zone may be liable to the tax at rates of 0.1% for financial instruments and 0.01% for derivatives. The proposed FTT has drawn considerable criticism from many quarters including the funds industries within the FTT-zone (e.g. France, Germany and Italy).
In April 2013, the UK Government formally applied to the European Court of Justice to legally challenge the introduction of the proposed tax.
Now, the French Treasury is seeking to negotiate certain exemptions with the European Commission.
The proposed Directive is currently being discussed by Member States, with a view to its implementation under enhanced cooperation. All 27 Member States may participate in the discussions on this proposal. However, only the Member States participating in enhanced cooperation will have a vote, and they must agree unanimously before it can be implemented. The European Parliament will also be consulted. It remains to be seen whether all of this can be achieved by the end of 2013.