The European Commission (EC) has indicated that plans to introduce a Financial Transactions Tax (FTT) are likely to be subject to delay, as opposition to the so-called ‘Robin Hood’ tax mounts say Northampton accountants Harris & Co who are at the forefront of delivering innovative accountancy services to new business start ups and ambitious small and medium sized businesses.
In February eleven EU member states, including France and Germany, said they would be introducing the tax at the start of next year. However, the latest update on progress posted on the EC’s website has thrown doubt on this timescale.
The website states:
‘Once agreed upon at European level, participating member states will have to transpose the directive into national legislation. If agreement is found before the end of 2013, and there is a speedy transposition into national law by the participating member states, this common framework for an FTT could still enter into force towards the middle of 2014.’
The announcement comes after tax commissioner Algirdas Semeta had to deny reports earlier this month that FTT was likely to be scaled back, with the tax on trading bonds and shares cut from 0.1% to 0.01%. It was also suggested that the tax would initially only apply to shares from January 2014, and to other financial instruments at a later date.
At the time, Semeta said it was ‘really premature to say what will be the final outcome of the situation, because member states are currently in the phase of the first reading... It"s normal in the first reading that member states go through the proposal article by article and the Commission explains what each provision means.’
Richard Asquith, head of tax at TMF Group, said:
‘This tax has been rushed in design and implementation, so a delay of at least six months would be no surprise. The countries involved will have to listen more closely to the markets and other countries if they are to get this right.’
A number of EU countries have already introduced their own versions of FTT, with disappointing results. Hungary’s FTT, launched in 2012, has raised less than 50% of the forecast; France’s version, launched in August 2012 has raised about 50% of anticipated income; and Italy’s FTT, launched 1 March 2013, has led to a sharp drop off in Italian share trading.