EU Eying to Instate Financial Transaction Tax

January 20, 2011 International Tax CooperationTaxation in EU

European CommissionThe European Commission has taken another step forward in the process of refining and potentially implementing ideas for an international financial transaction tax, as the issue was recently discussed in a meeting of EU-finance ministry representatives.

On January 19th the European Commission’s Tax Policy Group (TPG) , a committee within the European Commission (EC) tasked with addressing fundamental issues in taxation across the EU, held a meeting between the representatives of Finance Ministers of EU-member states, which was chaired by the Commissioner for Taxation, Customs, Anti-Fraud and Audit Algirdas Šemeta. While the discussions covered several subjects, the primary focus was to make headway into establishing a pan-European financial transaction tax or an expanded global tax.

The financial transaction tax concept, that was up for discussion at the meeting, was originally proposed on October 7th 2010 in a press-release of the European Commission. At the meeting Algirdas Šemeta revealed that the EC approves in principle of the concept for new tax. The potential revenues from the tax could be used as a reserve for unexpected future financial turmoil, or towards funding global development projects. The meeting was also expected to yield some results in the decision of how the raised taxes would be distributed, although any conclusion will not be published until later in 2011. The Commissioner stated that the EC believes a financial transaction tax system is the most promising avenue for a new tax revenue source in the European Union. The meeting was expected to make progress towards deciding the types of transactions which would subject to the new tax, and the liability balance between the parties participant in the selected transactions.

Photo by tiseb