On October 9, 2012, European Union (EU) Tax Commissioner,
Algirdas Semeta, informed the EU-27 Finance Ministers that 11
Member States support the introduction of a common
"EUwide" financial transactions tax (FTT) in their
countries via enhanced cooperation. Therefore, the first hurdle to
enhanced cooperation will soon be overcome, because before the FTT
can be put in place at least nine Member States are legally
required to formally send a letter to this effect to the
The Commissioner told the Economic and Financial Affairs
(ECOFIN) Council that the 11 supporters are broken down as
Support from 11 of the 27 EU Member States should be sufficient
for this initiative to go forward, presumably with an FTT that is
broadly based on stamp duty.
To move the process ahead, the 11 EU Member States, all from
Eurozone countries, must submit formal requests to the Commission,
specifying the scope and the objectives of the enhanced
cooperation. We understand that the scope and objectives of the
EU-wide FTT are still unclear and unspecified, other than that they
should be based on the Commission's original broad proposal for
an EU-wide FTT.
EU Tax Commissioner Semeta aims to present the Commission's
assessment of the participating Member States' requests, as
well as a draft Council decision, for discussion at the next ECOFIN
Council on November 13, 2012. The objective is to get authorization
from the Council for the 11 Member States to go ahead under
enhanced cooperation by December 2012, as agreed on June 28 and 29,
2012, by EU leaders in their Compact for Growth and Jobs. This
would require an EU-27 qualified majority vote (in this case 74% of
Member States' votes are needed, representing 62% of the
EU's population) in the Council, after obtaining the consent of
the European Parliament.
Formal requirements for enhanced cooperation are in Article 20
of the Treaty on European Union (TEU) and Articles 326 to 334 of
the Treaty on the Functioning of the European Union (TFEU).
The likely effective date of the "EUwide" FTT is
January 1, 2014.
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With the 2017 federal budget likely due to be released in late February or March, there is speculation that the government may curtail the preferential tax treatment afforded to gains on the disposition of capital property
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