As has been reported in the national media, the legal adviser to the EU’s finance ministers, the Council Legal Service, has concluded that one of the main provisions of the proposed European financial transaction tax (FTT) is ‘discriminatory, overreaches national jurisdiction and infringes the EU treaties’.
Reuters has reported the spokeswoman for EU tax commissioner Algirdas Semeta, who drafted the plan, as saying: ‘We stand firm that the proposed FTT is legally sound and fully in line with the EU treaties and international tax law.’
Leo Ringer, head of financial services and corporate governance at the CBI, said: ‘This opinion recognises that the FTT would have damaging implications for growth, jobs and investment beyond the member states involved, so now is the time to draw a line under this flawed proposal.’
Simon Leach, financial services tax partner at PwC, said the opinion follows a slowdown in the negotiations in recent months, as participating member states are struggling to reach a consensus on what form the tax should take.
‘Negotiations between the 11 participating member states have been on hold over the summer and it was widely anticipated there would be no further indications of the status until after the German Federal elections at the end of September. So the timing of the opinion is interesting, given the proximity to and importance of the German Federal elections,’ Leach said.
‘While the legal opinion is not binding on member states, it is likely to provide the participating member states with pause for thought ahead of negotiations which are due to restart at the end of September. The road toward a scaling back of the scope of the tax, perhaps towards a more traditional stamp style regime, now seems to be cleared’, he added.
As has been reported in the national media, the legal adviser to the EU’s finance ministers, the Council Legal Service, has concluded that one of the main provisions of the proposed European financial transaction tax (FTT) is ‘discriminatory, overreaches national jurisdiction and infringes the EU treaties’.
Reuters has reported the spokeswoman for EU tax commissioner Algirdas Semeta, who drafted the plan, as saying: ‘We stand firm that the proposed FTT is legally sound and fully in line with the EU treaties and international tax law.’
Leo Ringer, head of financial services and corporate governance at the CBI, said: ‘This opinion recognises that the FTT would have damaging implications for growth, jobs and investment beyond the member states involved, so now is the time to draw a line under this flawed proposal.’
Simon Leach, financial services tax partner at PwC, said the opinion follows a slowdown in the negotiations in recent months, as participating member states are struggling to reach a consensus on what form the tax should take.
‘Negotiations between the 11 participating member states have been on hold over the summer and it was widely anticipated there would be no further indications of the status until after the German Federal elections at the end of September. So the timing of the opinion is interesting, given the proximity to and importance of the German Federal elections,’ Leach said.
‘While the legal opinion is not binding on member states, it is likely to provide the participating member states with pause for thought ahead of negotiations which are due to restart at the end of September. The road toward a scaling back of the scope of the tax, perhaps towards a more traditional stamp style regime, now seems to be cleared’, he added.
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