Finance ministers of ten European nations, on May 6, reaffirmed their commitment to press ahead with a coordinated EU financial transaction tax, agreeing to a phased-in introduction of the tax beginning with the taxation of shares and some derivatives.
In joint statement released following an ECOFIN meeting in Brussels, finance minsters of Austria, Belgium, Germany, Estonia, Greece, France, Italy, Portugal, Slovakia, and Spain said their commitment to a financial transaction tax “remains strong.”
The group pledged to come up with “viable solutions” by the year’s end, and said that the first phase of implementation of the tax should begin, at the latest, by January 1, 2016. Slovenia, which originally supported the financial transaction tax, decided to not sign the joint statement, as the government is in transition.
The statement follows an April 30 decision of the European Court of Justice dismissing an action brought by the United Kingdom to annul the decision to authorize enhanced EU cooperation on a financial transaction tax.
EU ministers also considered an amendment to the parent-subsidiary directive to tackle hybrid loan arrangements. According to the amended rules, a cross-border company using a hybrid loan arrangement would be denied a tax exemption in the parent company’s state if the profit was deductible in the subsidiary’s member state.
According to EU Tax Commissioner, Algirdas Semeta, Sweden had concerns with the proposal and needed reassurances on a technical issue. The Council has asked national experts to examine the proposal further and clarify text as needed. The presidency will seek adoption of the amended directive at the Council’s June 20 meeting.
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