The European Commission’s proposal for an EU wide tax on financial transactions (FTT) has generated much public and political discussion since it was published on September 28, 2011.
EU Member States were, however, not able to reach unanimous agreement on the Commission’s proposals and it was therefore decided that those EU countries that did agree on the introduction of an EU FTT will move ahead with the proposal under the enhanced cooperation procedure. As a result, on February 14, 2013, the European Commission issued a revised proposal for a Directive to introduce a common FTT in the eleven Member States (Belgium, Germany, Estonia, Greece , Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia) that were authorized to move forward under the enhanced cooperation procedure. Following Estonia's formal withdrawal in March 2016, ten Member States continued to participate in discussions on this file, but did not reach agreement on the design of the FTT. In December 2019, the German Finance Minister issued a revised proposal of the FTT to the EU Member States participating in the enhanced cooperation procedure. The revised proposal included an optional exemption for pension schemes and a new system for mutualization of the FTT revenues, meaning the revenue generated would be allocated between the Member States wishing to introduce the tax. This proposal is still under discussion in the relevant working groups.
In parallel, the FTT has also been mentioned as a possible new EU own resource as part of the Union’s long-term budget (the multiannual financial framework – MFF) and the EU’s recovery fund (Next Generation EU), whereby the European Commission committed to put forward a proposal by June 2024. However, in the working document (PDF 1.7 MB) to the proposal for a second basket of own resources acknowledges that no substantial discussions have been held since February 2021 – when the Portuguese Presidency of the Council proposed an inclusive discussion among all Member States on tax design issues of the FTT at EU level. As such, in the European Commission’s view, the FTT is unlikely to materialize in short term.
In the meantime, several Member States (e.g. France, Italy, Spain) have introduced unilateral financial transaction taxes.
Financial sector organizations have a clear need to stay informed of developments in this area and the potential impact these may have on their business. In order to meet this need KPMG member firms have set up an FTT technical and business support unit, coordinated by KPMG’s EU Tax Centre. The unit combines tax and industry specialists from KPMG member firms in key European jurisdictions and is supported by a detailed knowledge and information sharing platform.
- ETF 442: Updates to the EU list of non-cooperative jurisdictions and possible re-launch of EU FTT and public CbC reporting proposals (February 2021)
- E-News 123 - EU's long term budget
- ETF 420: German Finance Minister issues amended Financial Transaction Tax proposal (December 1, 2019)
- ETF 419: ECOFIN discusses range of issues including energy taxation and the status of the EU blacklist (December 6, 2019)
- ETF 406: ECOFIN discusses Financial Transaction Tax and removes Dominica from the EU blacklist (June 14, 2019)
- ETF 306: ECOFIN meeting of December 6, 2016
- ETF 267: 10 EU Member States Agree on Some Principles for a Financial Transaction Tax; Others still under Discussion (9 December 2015)
- Memo from KPMG’s EU Tax Centre (PDF 70 KB) – EU FTT under enhanced cooperation: summary of European Parliament amendments (12 July 2013)
- KPMG response to frequently asked questions on the FTT
- European Commission's 2011 proposal for a Council Directive for an EU-wide FTT
- European Commission's 2013 proposal for a Council Directive implementing enhanced cooperation in the area of FTT
- European Commission Questions and Answers on FTT under Enhanced Cooperation (14 February 2013)
- European Commission FTT - Non-technical answers to some questions on core features and potential effects (PDF 40 KB) (2013)
- European Commission - How the FTT works in specific cases and other questions and answers (PDF 268 KB)
- European Parliament Legislative Train - Deeper and fairer internal market with a strengthened industrial base / taxation - Financial Transaction Tax (January 21, 2021)
- European Commission:
- European Parliament:
- Economic and Social Committee: opinion – enhanced cooperation (23 May 2013)
- Status of legislative procedure for the Commission’s FTT proposal – enhanced cooperation (23 May 2013)
- Court of Justice of the EU:
- UK Challenges financial transaction tax (PDF 67 KB) (24 May 2013)