EU: EU member states struggle with the proposed FTT
Bob van der Made
An EU-27 Council Working Party on Tax Questions – Indirect Taxation meeting was held on the proposed EU-wide FTT on April 16 2013, which revealed that the momentum for an EU FTT seems, temporarily, gone. The EU FTT dossier is in an impasse because of other pressing political issues, with member states now focusing on savings and automatic exchange of information in the wake of Luxemburg's recent announcements (easier to achieve political agreement on; European Council is expected to adopt Conclusions on savings in May). In addition, there's the recently announced five big EU member states' pilot on multilateral tax information exchange. Furthermore, the response to the OECD/G20 initiative on BEPS is very high on the political agenda at least until mid-June. Moreover, there's a (perhaps temporary) lack of direction and political and technical coordination among the ECP-11 (participating EU member states under the enhanced cooperation procedure. Germany's position is deadlocked until the September 2013 federal elections and France now seems increasingly cautious about an EU FTT after losing market share as a result of the introduction of its domestic FTT with which it is also facing operational difficulties.
Since a few weeks, ECP-11 representatives have been meeting separately (outside the standard formal EU-27 Council WG structure) every other week. However, during the April 16 technical working group meeting, the ECP-11 apparently were far from cohesive on even very basic points such as what they want to achieve, who they want to tax, what the FTT should look like, and how it should be implemented and collected.
The EU-27 member states are expected to discuss EU FTT again on May 22 and the Irish presidency will report to the ECOFIN Council and the European Council in June. Croatia has indicated it wishes to join the ECP-11 (Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain) after it joins the EU on July 1 2013.
Bob van der Made (email@example.com)
PwC, Brussels and Amsterdam
Tel: +31 88 792 3696