CELEX: 52013PC0071
Language: en
Date: 2013-02-14
Title: Proposal for a COUNCIL DIRECTIVE implementing enhanced cooperation in the area of financial transaction tax

|
			
		
		
		52013PC0071
		
			Proposal for a COUNCIL DIRECTIVE implementing enhanced cooperation in the area of financial transaction tax /* COM/2013/071 final - 2013/0045 (CNS) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
1.1.        Background and history
The recent global economic and financial
crisis had a serious impact on our economies and the public finances. The financial sector has played a major role in causing the economic
crisis whilst governments and European citizens at large have borne the cost.
There is a strong consensus within Europe and internationally that the
financial sector should contribute more fairly given the costs of dealing with
the crisis and the current under-taxation of the sector. Several EU Member
States have already taken divergent action in the area of financial sector
taxation. 
Therefore, on 28 September 2011 the
Commission tabled a proposal for a Council Directive on a common system of
financial transaction tax (FTT) and amending Directive 2008/7/EC[1]. The legal basis for the
proposed Council Directive was Article 113 TFEU, as the proposed provisions aim
at the harmonisation of legislation concerning the taxation of financial
transactions to the extent necessary to ensure the proper functioning of the
internal market for transactions in financial instruments and to avoid
distortion of competition. This legal basis prescribes Council unanimity in
accordance with a special legislative procedure, after consulting the European
Parliament and the Economic and Social Committee. 
The main objectives of this proposal were: 
–                        
harmonising legislation concerning indirect
taxation on financial transactions, which is needed to ensure the proper
functioning of the internal market for transactions in financial instruments
and to avoid distortion of competition between financial instruments, actors
and market places across the European Union, and at the same time
–                        
ensuring that financial institutions make a fair
and substantial contribution to covering the costs of the recent crisis and
creating a level playing field with other sectors from a taxation point of view[2], and 
–                        
creating appropriate disincentives for
transactions that do not enhance the efficiency of financial markets thereby
complementing regulatory measures to avoid future crises.
Given the extremely high mobility of most
of the transactions to be potentially taxed, it was and still is important to
avoid distortions caused by tax rules conceived by Member States acting
unilaterally. Indeed, a fragmentation of financial markets across activities
and across borders, and among products and actors can only be avoided and equal
treatment of financial institutions in the EU and thus ultimately, the proper
functioning of the internal market, can only be ensured through action at EU
level. The development of a common system of financial transaction tax in the
EU reduces the risk of distortion of markets through a taxation-induced
geographical delocalisation of activities. Furthermore, such common system can
also ensure tax neutrality through harmonisation with a broad scope, notably to
also cover very mobile products such as derivatives, mobile actors and market
places, thus also contributing to less double-taxation or double-non-taxation. 
The proposal therefore provided for
harmonisation of Member States’ taxes on financial transactions to ensure the
smooth functioning of the single market and thus set out the essential features
of a common system for a broad based FTT in the EU.
Since around the time of the initial
Commission proposal the case for harmonisation has been further illustrated by
developments in practice: France has introduced a national tax on certain
financial transactions since 1 August 2012 and Spain, Italy and Portugal have
recently made announcements of introducing such national taxes as well – all
with different scope, rates and technical design features.
The European Parliament delivered its
favourable opinion on 23 May 2012[3]
and the Economic and Social Committee on 29 March 2012[4] on the Commission’s initial
proposal. Also the Committee of Regions adopted a favourable opinion on 15
February 2012[5].
The proposal and variants thereof were
extensively discussed in the meetings of the Council which started under the
Polish Presidency[6] and continued at an accelerated pace under the Danish Presidency,
but failed to get the required unanimous support because of fundamental and
un-bridgeable differences amongst Member States. 
At the Council meetings of 22 June and 10
July 2012, it was ascertained that essential differences in opinion persist as
regards the need to establish a common system of FTT at EU level and that the
principle of harmonised tax on financial transactions will not receive
unanimous support within the Council in the foreseeable future. 
It follows from the above that the
objectives of a common system of FTT, as discussed in the Council upon the
Commission's initial proposal, cannot be attained within a reasonable period by
the Union as a whole.
On the basis of the request of eleven
Member States (Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia) the Commission submitted a proposal[7] to the Council for authorising
enhanced cooperation in the area of financial transaction tax. 
All Member States specified in their
requests that the scope and objectives of the Commission's legislative proposal
implementing enhanced cooperation should be based on the Commission's initial
FTT proposal. Furthermore, they specified that evasive actions, distortions and
transfers to other jurisdictions are to be avoided.
The present proposal for a Directive
concerns the implementation of the enhanced cooperation in the area of FTT, in
accordance with the authorisation of the Council of 22 January 2013, issued
following the European Parliament's consent given on 12 December 2012.
In the light of this new context of
enhanced cooperation, the 2011 Commission proposal mentioned above becomes
without object and the Commission therefore intends to withdraw it. 
The Commission Proposal
for a Council Decision on the system of own resources of the European Union of
29 June 2011[8],
as amended on 9 November 2011[9], set out that part of receipts generated by the FTT shall
constitute an own resource for the EU budget. This would imply that the
GNI-based resource drawn from the participating Member States would be reduced
accordingly. 
1.2. Objectives of the proposal
The general objectives of this proposal are
those of the Commission's original proposal of 2011. The recent and ongoing
global economic and financial crisis had a serious impact on the economies and
public finances in the EU. The financial sector has played a major role in
causing the economic crisis whilst governments and European citizens at large
have born the costs. Even though it is made of a wide variety of market actors,
the financial sector at large has experienced high profitability over the last
two decades which could be partially the result of an (implicit or explicit)
safety net provided by governments, combined with financial sector regulation
and VAT exemption.
Under these circumstances, some Member
States started to implement additional forms of financial sector taxation,
whilst other Member States already had in place specific tax regimes for
financial transactions. The current situation leads to the following
undesirable effects:
–              
a fragmentation of the tax treatment in the
internal market for financial services - bearing in mind the increasing number
of uncoordinated national tax measures being put in place- with the consequent
possibilities of distortions of competition between financial instruments,
actors and market places across the European Union and double taxation or
double non-taxation;
–              
the financial institutions do not make a fair
and substantial contribution to covering the cost of the recent crisis and a
level playing field with other sectors from a taxation point of view is not
ensured;
–              
taxation policy neither contributes to providing
disincentives for transactions which do not enhance the efficiency of financial
markets but which might only divert rents from the non-financial sector of the
economy to financial institutions and, thus, trigger over-investment in
activities that are not welfare enhancing, nor does it contribute alongside ongoing
regulatory and supervisory measures to avoid future crises in the financial
services sector.
The implementation of a common system of
financial transaction tax amongst a sufficient number of Member States would
entail immediate tangible advantages on all three points listed above, in
regard to financial transactions covered by enhanced cooperation. In connection
with these points, the position of the participating Member States in terms of
relocation risks, tax revenues and efficiency of the financial market and
avoidance of double taxation or non-taxation would be improved. 
The decision authorising enhanced cooperation
found that all the requirements of the Treaties in regard to such cooperation
are fulfilled, and in particular that the competences, rights and obligations
of non-participating Member States are respected. The present proposal sets out
the necessary substance for the cooperation thus authorised, in line with the
Treaty provisions. 
1.3.        General approach and
relationship with the Commission's initial proposal
This proposal is based on the Commission's
original proposal of 2011 in that it respects all the essential principles
thereof. However, some adaptations were made: 
–                        
to take account of the new context of enhanced
cooperation; this means in particular that the 'FTT jurisdiction' is limited to
participating Member States, that transactions carried out within a
participating Member State which would have been taxed under the original
proposal remain taxable, and that it is ensured that Council Directive
2008/7/EC of 12 February 2008 concerning indirect taxes on the raising of
capital[10],
whose modification had been proposed in the initial proposal, remains
unaffected;
–                        
to some of the proposed provisions for the sake
of clarity and 
–                        
to further strengthen anti-avoidance of
taxation; this is achieved through rules whereby taxation follows the
"issuance principle" as a last resort, which compounds the
"principle of establishment", which is maintained as the main principle.
This addition reflects notably the requests of the interested Member States
which referred to the need to avoid evasive actions, distortions and transfers
to other jurisdictions. Indeed, by complementing the residence principle with elements
of the issuance principle, it will be less advantageous to relocate activities
and establishments outside the FTT jurisdictions, since trading in the
financial instruments subject to taxation under the latter principle and issued
in the FTT jurisdictions will be taxable anyway. 
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
2.1.        External consultation and
expertise
The original proposal has been formulated
against the background of a wide range of external contributions. These contributions
took the form of feedback received in the course of a public consultation on
financial sector taxation, targeted consultations with the Member States, experts and the financial sector stakeholders, as well as three different
external studies commissioned for the purpose of the impact assessment
accompanying the original proposal. The results of the consultation process and
the external input are reflected in this impact assessment.
The present proposal does not differ
markedly from the Commission's September 2011 proposal and retains the same
solutions of principle for a common system of FTT under enhanced cooperation
(e.g. as regards the scope of the tax, the establishment of a financial
institution involved in a transaction as the connecting factor, the taxable
amount and rates and the person liable to pay the tax to the tax authorities)
and thus no new specific consultations were initiated by the Commission.
However, the Commission also benefited from
the consultation of all interested parties over the last year, such as Member
States, the European and national parliaments, representatives of the financial
industry from within and from outside the European Union, the academic world,
non-governmental organisations, and the results of ad hoc external studies that
had been published in the aftermath of the tabling of the Commission's initial
proposal on a common system of FTT for the entire European Union.
Commission representatives participated in
numerous public events across and outside Europe on the establishment of a
common system of financial transaction tax. Also, the Commission actively
participated in a dialogue with those national parliaments and their relevant
committees that so wished discussing the original Commission proposal.
2.2.        Impact assessment
The Commission services carried out an
impact assessment which accompanies its original proposal adopted on 28
September 2011. Further additional technical analysis of this proposal has been
presented on the Commission's website[11].
As requested by the Member States that have sought the authorisation for
enhanced cooperation, the scope and objectives of this proposal are based on
the Commission’s initial proposal. Therefore, the fundamental building blocks
of the latter proposal are not changed, so that a new impact assessment
covering the same subject area has not been considered appropriate. 
However, Member States had weighed
different alternative policy options within the framework of the initial
Commission proposal. Also, this new proposal is intended to implement enhanced
cooperation, as opposed to the initial proposal for a directive to be applied
by all Member States, and Member States have specifically shown interest in
learning more on the specific mechanisms that might be at work in this context
and their main effects. Therefore, the Commission services have undertaken an
additional analysis of these policy options and impacts that complements and
reviews, where appropriate, the findings of the impact assessment accompanying
the initial proposal of 2011. 
3.           LEGAL ELEMENTS OF THE PROPOSAL
3.1.        Legal basis
Council Decision 2013/52/EU of 22 January
2013 authorising enhanced cooperation in the area of financial transaction tax[12] authorised the Member States
listed in its Article 1 to establish enhanced cooperation in the area of FTT.
The pertinent legal basis for the proposed
Directive is Article 113 TFEU. The proposal aims at harmonising legislation
concerning indirect taxation on financial transactions, which is needed to
ensure the proper functioning of the internal market and to avoid distortion of
competition. Non-participating States’financial institutions will benefit from
the enhanced cooperation, as they will be confronted with only one common
system of FTT applicable in the participating Member States instead of a
multitude of systems.
3.2.        Subsidiarity and
proportionality
The harmonisation of legislation concerning
the taxation of financial transactions necessary for the proper functioning of
the internal market and to avoid distortions of competition, be it only among
the participating Member States, can only be achieved through a Union act, i.e.
by way of a uniform definition of the essential features of an FTT. The common
rules are necessary to avoid undue relocations of transactions and market
participants and substitution of financial instruments. 
By the same token, a uniform definition
could play a crucial role in reducing the existing fragmentation of the
internal market, including for the different products of the financial sector
that often serve as close substitutes. Non
harmonisation of FTT leads to tax arbitrage and potential double or
non-taxation. This not only prevents financial transactions to be carried out
on a level playing field, but also affects revenues of Member States.
Furthermore, it imposes extra compliance costs on the financial sector arising
from too different tax regimes. These findings remain valid in a context of
enhanced cooperation, even though such cooperation implies a more reduced
geographical reach than a similar scheme adopted at the level of all 27 Member
States.
The present proposal thus concentrates on
setting a common structure of the tax and common provisions on chargeability.
The proposal thus leaves a sufficient margin of manoeuvre for the participating
Member States when it comes to the actual setting of the tax rates above the
minimum. On the other hand, it is proposed to confer delegated powers to the
Commission as regards the specification of registration, accounting, reporting
and other obligations intended to ensure that FTT due to the tax authorities is
effectively paid to them As regards uniform methods of collection of the FTT
due, implementing powers conferred to the Commission are proposed.
A common framework for an FTT therefore respects
the subsidiarity and proportionality principle as set in Article 5 TEU. The objective of this
proposal cannot be sufficiently achieved by the Member States and can
therefore, by reason of ensuring the proper functioning of the internal market,
be better achieved at Union level, if necessary through enhanced cooperation.
The harmonisation proposed, in the form of
a Directive rather than a Regulation, does not go beyond what is necessary in
order to achieve the objectives pursued, first and foremost for the proper
functioning of the internal market. It thus complies with the principle of
proportionality.
3.3.        Detailed explanation of
the proposal
3.3.1.     Chapter I (Subject matter
and definitions)
This chapter defines the subject matter of
this proposed Directive containing the proposal for implementation of the
enhanced cooperation in the area of FTT. Furthermore, this chapter provides for
definitions of the main terms used in this proposal.
3.3.2.     Chapter II (Scope of the
common system of FTT)
This chapter defines the essential
framework of the proposed common system of FTT under enhanced cooperation. This
FTT aims at taxing gross transactions before any netting off.
The scope of the tax is wide, because it
aims at covering transactions relating to all types of financial instruments as
they are often close substitutes for each other. Thus, the scope covers
instruments which are negotiable on the capital market, money-market
instruments (with the exception of instruments of payment), units or shares in
collective investment undertakings - which include undertakings for collective
investment in transferable securities (UCITS) and alternative investment funds
(AIF)[13]
and derivatives contracts. Furthermore, the scope of the tax is not limited to
trade in organised markets, such as regulated markets, multilateral trading
facilities or systematic internalisers, but also covers other types of trades
including over-the-counter trade. It is also not limited to the transfer of
ownership but rather represents the obligation entered into, mirroring whether
or not the party concerned assumes the risk implied by a given financial
instrument ("purchase and sale"). 
Furthermore, where financial instruments
whose purchase and sale is taxable form the object of a transfer between separate
entities of a group, this transfer shall be taxable even though it might not be
a purchase or sale.
Exchanges of financial instruments and
repurchase and reverse repurchase and securities lending and borrowing
agreements are explicitly included into the scope of the tax. For reasons of
avoiding tax circumvention exchanges of financial instruments are considered to
give rise to two financial transactions. On the other hand, by way of
repurchase and reverse repurchase agreements and securities lending and
borrowing agreements, a financial instrument is put at the disposal of a given
person for a defined period of time. All such agreements should therefore be
considered as giving rise to one financial transaction only. 
Additionally, in order to prevent tax
avoidance, each material modification of a taxable financial transaction should
be considered a new taxable financial transaction of the same type as the
original transaction. It is proposed to add a non-limitative list of what can
be considered a material modification.
Also, where a derivatives contract results
in a supply of financial instruments, in addition to the taxable derivatives
contract, the supply of these financial instruments is also subject to tax,
provided that all other conditions for taxation are fulfilled. 
For the financial instruments which may
form the object of a taxable financial transaction, the relevant regulatory
framework at EU level provides a clear, comprehensive and accepted set of
definitions[14].
It emerges from the definitions used that spot currency transactions are not
taxable financial transactions, while currency derivative contracts are.
Derivative contracts relating to commodities are also covered, while physical
commodity transactions are not.
Structured products, meaning tradable securities or other financial instruments offered by way of
a securitisation can also form the object of taxable financial transactions. Such products are comparable to any other financial instrument and
thus need to be covered by the term financial instrument as used in this
proposal. Excluding them from the scope of FTT would open avoidance
opportunities. This category of products notably includes certain notes,
warrants and certificates as well as banking securitisations which usually transfer
a large part of the credit risk associated with assets such as mortgages or
loans into the market, as well as insurance
securitisations, which involve the transfers of other types of risk, for
example the underwriting risk. 
However, the scope of the tax is focused on
financial transactions carried out by financial institutions acting as party to
a financial transaction, either for their own account or for the account of
other persons, or acting in the name of a party to the transaction. This approach
ensures that FTT is comprehensively applied. In practical terms the presence of
financial transactions is usually evident via respective entries in the books. The
imposition of FTT should not negatively affect the refinancing possibilities of
financial institutions and States, nor monetary policies in general or public
debt management. Therefore, transactions with the European Central Bank, the
European Financial Stability Facility, the European Stability Mechanism, the European
Union where it exercises the function of management of its assets, of balance
of payment loans and of similar activities, and the central banks of Member
States should be excluded from the scope of the Directive. 
The provisions of Council Directive
2008/7/EC continue to be fully applicable. Article 5 (1)(e) and (2) of that
Directive is relevant to the area covered by the present Directive and
prohibits the imposition of any tax whatsoever on the transactions referred to
in its terms, subject to Article 6(1)(a) of the same Directive. To the extent
Directive 2008/7/EC thus prohibits or could prohibit the imposition of taxes on
certain transactions, in particular financial transactions as part of
restructuring operations or of the issue of securities as defined in this
Directive, they should not be subject to FTT. The aim is to avoid any possible
conflict with Directive 2008/7/EC, without it being necessary to ascertain the
precise limits of the obligations imposed by that Directive. Moreover,
independently from the extent to which Directive 2008/7/EC prohibits taxation
of the issuance of shares and units of collective investment undertakings
considerations of tax neutrality require the single treatment of issuances by
all these undertakings. The redemption of shares and units thus issued are
however not in the nature of a primary market transaction and should thus be
taxable.
Further to the exclusion of primary markets
explained above most day-to-day financial activities relevant for citizens and
businesses remain outside the scope of the FTT. This is the case for the
conclusion of insurance contracts, mortgage lending, consumer credits, enterprise
loans, payment services etc. (though the subsequent trading of these via
structured products is included). Also, currency transactions on spot markets
are outside the scope of the FTT, which preserves the free movement of capital.
However, derivatives contracts based on currency transactions are covered by
the FTT since they are not as such currency transactions.
The definition of financial institutions is
broad and essentially includes investment firms, organised markets, credit
institutions, insurance and reinsurance undertakings, collective investment
undertakings and their managers, pension funds and their managers, holding
companies, financial leasing companies, special purpose entities, and where
possible refers to the definitions provided by the relevant EU legislation
adopted for regulatory purposes. Additionally, other undertakings,
institutions, bodies or persons carrying out certain financial activities with
a significant annual average value of financial transactions should be
considered as financial institutions. The present proposal sets the threshold
at 50% of its overall average net annual turnover of the entity concerned.
The proposed Directive provides for further
technical details of the calculation of the value of the financial transactions
and the average of values referred to in respect of entities that may be
regarded as financial institutions only on account of the value of the financial
transactions they carry out, and makes provision for situations where such
entities no longer qualify as financial institutions.. 
Central Counterparties (CCPs), Central Securities Depositories
(CSDs), International Central Securities Depositories (ICSDs) and Member States and public bodies entrusted with the function of managing public debt, when
exercising that function are not considered financial institutions to the
extent they are not engaged in trading activity in itself. They are also key
for a more efficient and more transparent functioning of financial markets and
for a proper management of public debt. However, because of their central role
certain obligations relating to ensuring the payment of the tax to the tax
authorities and to the verification of the payment should continue to apply. 
The territorial application of the proposed
FTT and the participating Member States’ taxing rights are defined on the basis
of the rules laid down in Article 4. This provision refers to the notion of “establishment”.
In essence, it is based on the "residence principle" supplemented by
elements of the issuance principle with a view mainly to strengthen anti-relocation
(details regarding this latter aspect are set out further below).
In order for a financial transaction to be
taxable in the participating Member States, one of the parties to the
transaction needs to be established in the territory of a participating Member State according to the criteria of Article 4. Taxation will take place in the participating
  Member State in the territory of which the establishment of a financial
institution is located, on condition that this institution is party to the
transaction, acting either for its own account or for the account of another
person, or is acting in the name of a party to the transaction. 
In case the different financial
institutions, as parties to the transaction or acting in the name of such
parties, are established in the territory of different participating Member
States, according to the criteria of Article 4, each of these different Member
States will be competent to subject the transaction to tax at the rates it has
set in accordance with this proposal. Where the establishments concerned are
located in the territory of a State which is not a participating Member State
the transaction is not subject to FTT in a participating Member State, unless
one of the parties to the transaction is established in a participating Member
State in which case the financial institution that is not established in a participating
Member State will also be deemed to be established in that participating Member
State and the transaction becomes taxable there. 
One particular change due to the new
context of enhanced cooperation concerns what was Article 3(1)(a) of the initial
proposal. Within that proposal, the reference to a financial institution
“authorised” by a Member State covered headquarter authorisations and
authorisations provided by the Member State concerned in regard to transactions
operated by third-country financial institutions without a physical presence in
the territory of that Member State. In the former configuration, transactions
may be covered, according to the case, by a “passport” foreseen in EU
legislation. The only “authorisation” is then the one granted to the
headquarters of the financial institution. In a context of enhanced cooperation,
a new configuration may raise, namely of institutions with headquarters in a
non-participating Member State that operate on the basis of a “passport” in the
FTT jurisdiction (cf. e.g. Article 31 of Directive 2004/39/EC). The latter
situation should be assimilated to the situation of third country institutions
operating on the basis of a specific authorisation provided by the Member State concerned by the transaction.
The residence principle is supplemented
also by elements of the "issuance
principle" as a last resort, in order to improve the resilience of the
system against relocation. Indeed, by complementing the residence principle
with the issuance principle, it will be less advantageous to relocate
activities and establishments outside the FTT jurisdictions, since trading in
the financial instruments subject to taxation under the latter principle and
issued in the FTT jurisdictions will be taxable anyway. This applies where none
of the parties to the transaction would have been “established” in a
participating Member State, on the basis of the criteria set out in the
Commission’s initial proposal but where such parties are trading in financial
instruments issued in that Member State. This concerns essentially shares,
bonds and equivalent securities, money-market instruments, structured products,
units and shares in collective investment undertakings and derivatives traded
on organised trade venues or platforms. In the context of the issuance
principle, which also underlies certain existing national financial sector
taxes, the transaction is linked to the participating Member State in which the issuer is located. The persons involved in such transaction will be deemed
to be established in that Member State because of this link, and the financial
institution(s) concerned will have to pay FTT in that State. 
All the above mentioned criteria are subject
to a general rule, regarding the case where the person liable to pay the tax
proves that there is no link between the economic substance of the transaction
and the territory of any participating Member State. In that case, the
financial institution or other person shall not be considered established
within a participating Member State. 
All in all, through the connecting factors
chosen in combination with the above mentioned general rule, it is ensured that
taxation can only take place in the presence of a sufficient link between the
transaction and the territory of the FTT jurisdiction. As in existing EU
legislation in the area of indirect taxes, territoriality principles are fully
respected.
3.3.3.     Chapter III (chargeability,
taxable amount and rates)
The moment of chargeability is defined as
the moment when the financial transaction occurs. Subsequent cancellation
cannot be considered as a reason to exclude chargeability of the tax, except in
cases of errors. 
As transactions in derivatives and in
financial instruments other than derivatives have a different nature and characteristics,
they have to be associated to different taxable amounts. 
For the purchase and sale of financial
instruments (other than derivatives), usually a price or any other form of
consideration will be determined. Logically, this is to be defined as the
taxable amount. However, to avoid market distortions special rules are
necessary where the consideration is lower than the market price or for transactions taking place between entities of a group and which are
not covered by the notions of "purchase" and "sale". In these cases the taxable amount is to be the market price
determined at arm's length at the time FTT becomes chargeable. Such
transactions between entities of a group are likely to involve transfers
without consideration, while transfers for consideration correspond to the
notions of "purchase" and "sale".
For the purchase/sale, transfer, exchange, conclusion
of derivative contracts, and material modifications thereof, the taxable amount
of the FTT shall be the notional amount referred to in the derivatives contract
at the time it is purchased/sold, transferred, exchanged, concluded or when the
operation concerned is materially modified. This approach would allow for a
straightforward and easy application of FTT on derivative contracts while ensuring
low compliance and administrative costs. Also, this approach makes it more
difficult to artificially reduce the tax burden through creative contract
design for the derivative contract as there would be no tax incentive for
example to enter into a contract on differences in prices or values only.
Furthermore it implies the taxation at the moment of the purchase/sale,
transfer, exchange, conclusion of the contract or material modification of the
operation concerned, as compared to taxing cash-flows at different moments in
time during the life cycle of the contract. The rate to be used in this case
will need to be rather low in order to define an adequate tax burden.
Special provisions might be necessary in
the participating Member States in order to prevent fraud and evasion and a
general anti-abuse rule is proposed (see also section 3.3.4). This rule could for
example be applied in cases where the notional amount is artificially divided: the notional amount of a swap could for instance be divided by an
arbitrarily large factor and all payments could be multiplied by the same
factor. This would leave the cash flows of the instrument unchanged but
arbitrarily shrink the size of the tax base.
Special provisions are necessary to
determine the taxable amount in respect of transactions where the taxable
amount or parts thereof are expressed in another currency than that of the
participating Member State of assessment.
Transactions in derivatives and
transactions in other financial instruments are different in nature. Moreover,
markets are likely to react differently to a financial transaction tax applied
to each of these two categories. For these reasons, and in order to ensure a
broadly even taxation, the rates should be differentiated as between the two
categories.
The rates should also take into account
differences in the applicable methods for the determination of the taxable
amounts. 
Generally speaking, the minimum tax rates (above which there is room of manoeuvre for
national policies) are proposed to be set at a level sufficiently high for the
harmonisation objective of this Directive to be achieved. At the same time, the
proposed rates are situated low enough so that delocalisation risks are
minimised. 
3.3.4.     Chapter IV (Payment of FTT,
related obligations and prevention of evasion, avoidance and abuse)
This proposal defines the scope of FTT by
reference to financial transactions to which a financial institution
established in the territory of the participating Member State concerned is
party (acting either for its own account or for the account of another person)
or transactions where the institution acts in the name of a party. In fact,
financial institutions execute the bulk of transactions on financial markets,
and the FTT should concentrate on the financial sector as such rather than on
citizens. Therefore, these institutions should be liable to pay the tax to the
tax authorities of the participating Member States in the territories of which
these financial institutions are deemed to be established. However, in order to
avoid a certain cascade of the tax, when a financial institution acts in the
name or for the account of another financial institution, only that other
financial institution should pay the tax.
It is also proposed to ensure as far as possible
that FTT is effectively paid. According to the terms of this proposal,
therefore, in case the FTT due on account of a transaction has not been timely
paid each party to that transaction should be held jointly and severally liable
for the payment of the tax. Moreover, participating Member States should have
the possibility to hold other persons jointly and severally liable for payment
of the tax, including in cases where a party to a transaction has its
headquarters located outside the territory of the participating Member States. 
This proposal also provides for time limits
for the payment of FTT to the accounts determined by the participating Member
States. Most financial transactions are carried out by electronic means. In
these cases, FTT should be paid immediately at the moment of chargeability. In
other cases, the tax should be paid within a period which, while being
sufficiently long so as to allow for the manual processing of the payment,
avoids that unjustifiable cash-flow advantages accrue to the financial
institution concerned. A period of three working days from the moment of
chargeability can be considered appropriate in this sense.
The participating Member States should be
obliged to take appropriate measures for registration, accounting, reporting
and other obligations for the FTT to be levied accurately and timely and
effectively paid to the tax authorities. In this regard, it is proposed to
empower the Commission to provide for further details. This is necessary in
order to ensure harmonised measures reducing compliance costs for operators and
to enable speedy technical adaptations whenever they are necessary. In this
context, the participating Member States should take advantage of existing and
forthcoming EU legislation on financial markets that includes reporting and
data maintenance obligations with respect to financial transactions.
The proposed Directive would also oblige
Member States to take measures in order to prevent fraud and evasion. 
Furthermore, in order to address the risk
of abuse which could undermine the proper operation of the common system, it is
proposed to set out a number of details in the directive. Thus, the proposal
contains a general anti-abuse rule, based on the similar clause included in the
Commission Recommendation of 6 December 2012 on aggressive tax planning[15], as well as a provision based
on the same principles but addressing the particular problems linked to
depositary receipts and similar securities.
In order to avoid complications in the
collection of the tax through differing collection methods, and ensuing
unnecessary compliance costs, the methods applied by the participating Member
States for the collection of the FTT due should be uniform, to the extent
necessary for those purposes. Such uniform methods would also contribute to
equal treatment of all taxpayers. Therefore, the proposed Directive provides
for an empowerment of the Commission to adopt implementing measures to this
effect. 
In order to ease the administration of the
tax, the participating Member States could introduce national (publicly
accessible) registries for the FTT entities. In practice, they could make use
of existing codification, for instance the Business Identification Codes
(BIC/ISO 9362) for both financial and non-financial institutions, the
Classification of Financial Instruments (CFI/ISO 10962) for financial
instruments and the Market Identifier Code (MIC/ISO 10383) for the different
markets.
In addition to discussions on the
definition of uniform collection methods in the relevant Committee, the
Commission might organise regular expert meetings with a view to discuss with
the participating Member States the operation of the Directive once adopted, in
particular ways of ensuring the proper payment of the tax and the verification of
payment, as well as matters pertaining to the prevention of tax evasion,
avoidance and abuse.
The draft Directive does not address issues
of administrative cooperation which are covered in existing instruments
relating to the assessment and recovery of taxes, in particular Directive
2011/16/EU of the Council of 15 February on administrative cooperation in the
field of taxation and repealing Directive 77/799/EEC[16] (applicable as of 1 January
2013), Directive 2010/24/EU of the Council of 16 March 2010 concerning mutual
assistance for the recovery of claims relating to taxes, duties and other
measures[17]
(applicable as of 1 January 2012). The directive proposed here neither adds to
those instruments, nor does it diminish their scope. They continue to apply to
all taxes of any kind levied by or on behalf a Member State[18], and this encompasses FTT as
it does any other tax thus levied. These instruments apply to all Member States
who should provide assistance within the limits and conditions thereof. Other
instruments which are relevant in this context include the OECD - Council of
Europe Multilateral Convention on Mutual Administrative Assistance in Tax
Matters[19].
Together with the conceptual approach
underlying the FTT (broad scope, broadly defined residence principle, no
exemptions), the rules outlined above allow to minimise tax evasion, avoidance
and abuse. 
3.3.5.     Chapter V (Final
provisions)
It follows from the harmonisation objective
of this proposal that the participating Member States should not be allowed to
maintain or introduce taxes on financial transactions as defined in this
proposal other than the FTT object of the proposed Directive or VAT. Indeed, as
far as VAT is concerned, the right of option to tax as provided for in Article
137(1)(a) of Council Directive 2006/112/EC of 28 November 2006 on the common
system of value added tax[20]
continues to apply. Other taxes like those on insurance premiums etc. have of
course a different nature, as have registration fees on financial transactions,
in case they represent a genuine re-imbursement of costs or consideration for a
service rendered. Such taxes and fees are thus not affected by this proposal.
It is proposed for the participating Member
States to communicate to the Commission the text of the provisions transposing
the proposed Directive into national legal provisions. No provision of
explanatory documents is proposed in this respect, given the limited number of
articles in the proposal and ensuing obligations on Member States. 
4.           BUDGETARY IMPLICATION 
Preliminary estimates indicate that,
depending on market reactions, the revenues of the tax could have been between EUR
30 and 35 billion on a yearly basis in the whole of participating Member States
in case the original proposal for EU27 had been applied to EU11. However, when
taking account of the net effects of the adjustments made as compared to the
original proposal, notably (i) the issue of units and shares of UCITS and AIF
is no longer considered not to be a primary market transaction, and (ii) the
anti-relocation provisions of the residence principle as initially defined have
been strengthened by complementing them with elements of the issuance
principle, preliminary estimates indicate that the revenues of the tax could be
in the order of magnitude of EUR 31 billion annually.
The Commission Proposal
for a Council Decision on the system of own resources of the European Union of
29 June 2011[21],
as amended on 9 November 2011[22], set out that part of receipts generated by the FTT shall
constitute an own resource for the EU Budget. The GNI-based resource drawn from
the participating Member States would be reduced accordingly. 
The European Council of 7/8 February 2013
invited the participating Member States to examine if the FTT could become the
base for a new own resource for the EU Budget.
2013/0045 (CNS)
Proposal for a
COUNCIL DIRECTIVE
implementing enhanced cooperation in the
area of financial transaction tax
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 113 thereof,
Having regard to Council Decision 2013/52/EU
of 22 January 2013 authorising enhanced cooperation in the area of financial
transaction tax[23],
Having regard to the proposal from the
European Commission,
After transmission of the draft legislative
act to the national Parliaments,
Having regard to the opinion of the
European Parliament[24],

Having regard to the opinion of the
European Economic and Social Committee[25],

Acting in accordance with a special
legislative procedure,
Whereas:
(1)       In 2011, the Commission
took note of a debate on-going at all levels on additional taxation of the
financial sector. The debate originates from the desire to ensure that the
financial sector fairly and substantially contributes to the costs of the
crisis and that it is taxed in a fair way vis-à-vis other sectors for the
future, to dis-incentivise excessively risky activities by financial
institutions, to complement regulatory measures aimed at avoiding future crises
and to generate additional revenue for general budgets or specific policy
purposes.
(2)       By Decision 2013/52/EU the
Council authorised enhanced cooperation between Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (hereinafter "participating Member States") in the area of financial transaction
tax (FTT).
(3)       In
order to prevent distortions through measures taken unilaterally by the
participating Member States, bearing in mind the extremely high mobility of
most of the relevant financial transactions, and thus to improve the proper
functioning of the internal market, it is important that the basic features of
a FTT in the participating Member States are harmonised at Union level.
Incentives for tax arbitrage between the participating Member States and allocation distortions between financial markets in those States, as well as
possibilities for double or non-taxation should thereby be avoided.
(4)       The improvement of the
operation of the internal market, in particular the avoidance of distortions
between the participating Member States requires that a FTT applies to a
broadly determined range of financial institutions and transactions, to trade
in a wide range of financial instruments, including structured products, both
in the organised markets and "over-the-counter", as well as to the
conclusion of all derivative contracts and to material modifications of the operations
concerned. 
(5)       In principle, each
transfer agreed upon, of one or more financial instruments, is linked to a
given transaction which in turn should be subject to FTT on account of such
agreed transfer. Since an exchange of financial instruments gives rise to two
such transfers, each such exchange should be considered as giving rise to two
transactions, so as to avoid circumvention of the tax. By way of repurchase and
reverse repurchase and securities lending and borrowing agreements, a financial
instrument is put at the disposal of a given person for a specified period of
time. All such agreements, as well as their material modification, should
therefore be considered as giving rise to one transaction only.
(6)       In order to preserve the
efficient and transparent functioning of financial markets or the public debt
management, it is necessary to exclude certain entities from the scope of the FTT,
in as much as these are exercising functions which are not considered to be
trading activity in itself but rather facilitating trade or protecting the management
of public debt. However, entities excluded specifically because of their central
role for the functioning of financial markets or public debt management should
be made subject to the rules that ensure the proper payment of the tax to the
tax authorities and the verification of the payment. 
(7)       The imposition of FTT should
not negatively affect the refinancing possibilities of financial institutions
and States, nor monetary policies in general. Therefore, transactions with the
European Central Bank, the European Financial Stability Facility, the European
Stability Mechanism, the European Union where it exercises the function of
management of its assets, of balance of payment loans and of similar activities,
and the central banks of Member States should not be subject to FTT.
(8)       With
the exception of the conclusion or material modification of derivative
contracts, the trade on primary markets and transactions relevant for citizens
and businesses such as conclusion of insurance contracts, mortgage lending,
consumer credits or payment services should be excluded from the scope of FTT, so as not to undermine the raising of capital by
companies and governments and to avoid impact on households. 
(9)       The provisions of Council
Directive 2008/7/EC of 12 February 2008 concerning indirect taxes on the
raising of capital[26]
continue to be fully applicable. Article 5(1)(e) and (2) of that Directive is
relevant to the area covered by this Directive and prohibits, subject to
Article 6(1)(a) of that Directive, the imposition of any tax whatsoever on the
transactions referred to in its provisions. Transactions in respect of which
Directive 2008/7/EC prohibits or could prohibit the imposition of taxes should therefore
not be subject to FTT. Independently from the extent to which Directive
2008/7/EC prohibits taxation of the issuance of shares and units collective
investment undertakings, considerations of tax neutrality require a single
treatment of issuances by all these undertakings. The redemption of shares and
units thus issued are however not in the nature of a primary market transaction
and should thus be taxable.
(10)     The
chargeability and taxable amount should be harmonised so as to avoid
distortions in the internal market.
(11)     The
moment of chargeability should not be unduly delayed and should coincide with
the moment where the financial transaction occurs. 
(12)     In
order to allow for the taxable amount to be determined as easily as possible so
as to limit costs for businesses and for tax administrations, in the case of financial transactions other than those related to
derivatives contracts reference should be made normally
to the consideration granted in the context of the transaction. Where no
consideration is granted or where the consideration granted is lower than the
market price, the market price should be referred to as a fair reflection of the
value of the transaction. Equally for reasons of ease of calculation, where
derivatives contracts are purchased/sold, transferred, exchanged, concluded or where
these operations are materially modified, the notional amount referred to in
the contract should be used. 
(13)     In
the interest of equal treatment, a single tax rate should apply within each
category of transactions, namely trade in financial instruments other than
derivatives and material modification of the operations concerned, on the one
hand, and the purchase/sale, transfer, exchange, conclusion of derivatives
contracts, and material modification of these operations on the other hand.
(14)     In order to concentrate the
taxation on the financial sector as such rather than on citizens and because
financial institutions execute the vast majority of transactions on financial
markets, the tax should apply to those institutions, whether they trade in
their own name, in the name of other persons, for their own account or for the
account of other persons. 
(15)     Because
of the high mobility of financial transactions and in order to help mitigating
potential tax avoidance, the FTT should be applied on the basis of the
residence principle. To further minimise the risk of relocation of
transactions, while maintaining a single reference to “establishment” for ease
of application, this principle should be supplemented by elements of the
issuance principle. Thus, for transactions in certain financial instruments,
the persons involved should be considered established in the participating Member State in which the instrument has been issued.
(16)     The
minimum tax rates should be set at a level sufficiently high for the
harmonisation objective of a common FTT to be achieved. At the same time, they
have to be low enough so that delocalisation risks are minimised.
(17)     It should be avoided that
any side of a single transaction be taxed more than once. Therefore, where a
financial institution acts in the name or for the account of another financial
institution, only that other financial institution should pay the tax.
(18)     In
order for the FTT to be levied in an accurate and timely manner, the
participating Member States should be obliged to take the necessary measures. 
(19)     In order to prevent tax fraud
and evasion the participating Member States should be obliged to adopt
appropriate measures.
(20)     In order to prevent tax
avoidance and abuse through artificial schemes, it is necessary to provide for
a general anti-abuse rule. A specific rule based on the same principles should
be added with a view to address the particular problems linked to depositary receipts
and similar securities.
(21)     In order to allow the
adoption of more detailed rules in certain technical areas, regarding
registration, accounting, reporting obligations and other obligations intended
to ensure that FTT due to the tax authorities is effectively paid to the tax
authorities, and their timely adaptation as appropriate, the power to adopt
acts in accordance with Article 290 of the Treaty on the Functioning of the
European Union should be delegated to the Commission in respect of specifying
the measures necessary to this effect. It is of particular importance that the
Commission carries out appropriate consultations during its preparatory work,
including at expert level. The Commission, when preparing and drawing-up
delegated acts, should ensure a timely and appropriate transmission of relevant
documents to the Council.
(22)     In order to ensure uniform
conditions for the implementation of this Directive, as regards the collection
of the tax in the participating Member States, implementing powers should be
conferred on the Commission. Those powers should be exercised in accordance
with Regulation (EU) No 182/2011 of the European Parliament and of the Council
of 16 February 2011 laying down the rules and general principles concerning
mechanisms for control by Member States of the Commission’s exercise of
implementing powers.[27]
(23)     Since market operators will
need some time to adjust to the new rules, an appropriate period of time should
be provided for between the adoption of the national rules necessary to comply
with this Directive and the application of those rules.
(24)     Since the objective of this
Directive, namely to harmonise the essential features of a FTT within the
participating Member States at Union level, cannot be sufficiently achieved by
these Member States and can therefore, by reason of improving the proper
functioning of the Single Market, be better achieved at Union level, the Union
may adopt measures, in accordance with the principle of subsidiarity as set out
in Article 5 of the Treaty on European Union. In accordance with the principle
of proportionality, as set out in that Article, this Directive does not go
beyond what is necessary in order to achieve this objective,
HAS ADOPTED THIS DIRECTIVE:
Chapter I 
Subject matter and definitions
Article 1
Subject matter
1.           This Directive implements
the enhanced cooperation authorised by Decision 2013/52/EU by laying down
provisions for a harmonised financial transaction tax (FTT).
2.           Participating Member
States shall charge FTT in accordance with this Directive.
Article 2
Definitions 
1.           For the purposes of this
Directive, the following definitions shall apply:
(1)                   
'Participating Member State' means a Member
State which participates, at the time when FTT becomes chargeable pursuant to
this Directive, in enhanced cooperation in the area of FTT by virtue of
Decision 2013/52/EU, or by virtue of a decision adopted in accordance with the
second or third subparagraph of Article 331(1) of the TFEU;
(2)                   
'Financial transaction' means any of the
following:
(a)         
the purchase and sale of a financial instrument
before netting or settlement; 
(b)         
the transfer between entities of a group of the
right to dispose of a financial instrument as owner and any equivalent
operation implying the transfer of the risk associated with the financial
instrument, in cases not subject to point (a);
(c)         
the conclusion of derivatives contracts before
netting or settlement;
(d)         
an exchange of financial instruments;
(e)         
a repurchase agreement, a reverse repurchase
agreement, a securities lending and borrowing agreement;
(3)                   
'Financial instruments' means financial
instruments as defined Section C of Annex I to Directive 2004/39/EC of the
European Parliament and of the Council[28],
and structured products;
(4)                   
'Derivatives contract' means a financial
instrument as defined in points (4) to (10) of Section C of Annex I to
Directive 2004/39/EC, as implemented by Articles 38 and 39 of Commission
Regulation (EC) No 1287/2006[29];
(5)                   
'Repurchase agreement' and 'reverse repurchase
agreement' means an agreement as defined in Article 3(1)(m) of Directive
2006/49/EC of the European Parliament and of the Council[30];
(6)                   
'Securities lending agreement' and 'securities
borrowing agreement' mean an agreement referred to in Article 3 of Directive
2006/49/EC;
(7)                   
'Structured product' means tradable securities or other financial instruments offered by way of
a securitisation within the meaning of Article 4(36) of Directive 2006/48/EC of
the European Parliament and of the Council[31]
or by way of equivalent transactions involving the transfer of risks other than
credit risk; 
(8)                   
'Financial institution' means any of the
following:
(a)         
an investment firm as defined in Article 4(1)(1)
of Directive 2004/39/EC;
(b)         
a regulated market as defined in Article 4(1)(14)
of Directive 2004/39/EC and any other organised trade venue or platform;
(c)         
a credit institution as defined in Article 4(1)
of Directive 2006/48/EC;
(d)         
an insurance and reinsurance undertaking as
defined in Article 13 of Directive 2009/138/EC of the European Parliament and
the Council[32];
(e)         
an undertaking for collective investments in
transferable securities (UCITS) as defined in Article 1(2) of Directive
2009/65/EC of the European Parliament and of the Council[33] and a management company as defined
in Article 2(1)(b) of Directive 2009/65/EC;
(f)           
a pension fund or an institution for
occupational retirement provision as defined in Article 6(a) of Directive
2003/41/EC of the European Parliament and of the
Council[34], an investment manager of such fund or institution; 
(g)         
an alternative investment fund (AIF) and an
alternative investment fund manager (AIFM) as defined in Article 4 of Directive
2011/61/EU of the European Parliament and of the Council[35]; 
(h)         
a securitisation special purpose entity as
defined in Article 4(44) of Directive 2006/48/EC;
(i)           
a special purpose vehicle as defined in Article
13(26) of Directive 2009/138/EC;
(j)           
any other undertaking, institution, body or
person carrying out one or more of the following activities, in case the
average annual value of its financial transactions constitutes more than fifty
per cent of its overall average net annual turnover, as referred to in Article 28 of Council Directive 78/660/EEC[36]: 
(i)      activities
referred to in points 1, 2, 3 and 6 of Annex I to Directive 2006/48/EC;
ii)       trading
for own account or for account or in the name of customers with respect to any
financial instrument;
(iii)     acquisition
of holdings in undertakings; 
(iv)    participation
in or issuance of financial instruments;
(v)     the
provision of services related to activities referred to in point (iv);
(9)                   
'Central Counter Party' (CCP) means a CCP as
defined in Article 2(1) of Regulation (EU) No 648/2012 of the European
Parliament and of the Council[37];
(10)               
'Netting' means netting as defined in Article 2(k)
of Directive 98/26/EC of the European Parliament and of the Council[38];
(11)               
'A financial instrument referred to in Section C
of Annex I to Directive 2004/39/EC and structured products issued within the
territory of a participating Member State' means such a financial instrument
that is issued by a person who has its registered seat or, in case of a natural
person, its permanent address or, if no permanent address can be ascertained,
its usual residence in that State; 
(12)               
'Notional amount' means the underlying nominal
or face amount that is used to calculate payments made on a given derivative
contract.
2.           Each of the operations
referred to in points (a), (b), (c) and (e) of paragraph 1(2) shall be
considered to give rise to a single financial transaction. Each exchange as
referred to in point (d) thereof shall be considered to give rise to two
financial transactions. Each material modification of an operation as referred
to in points (a) to (e) of paragraph 1(2) shall be considered to be a new
operation of the same type as the original operation. A modification is
considered to be material in particular where it involves a substitution of at
least one party, in case the object or scope of the operation, including its
temporal scope, or the consideration agreed upon is altered, or where the
original operation would have attracted a higher tax had it been concluded as
modified.
3.           For
the purposes of point (8)(j) of paragraph 1:
(a)         
the average annual value referred to in that point
shall be calculated either over the three preceding calendar years or, in the case
of a shorter period of previous activity, over that shorter period; 
(b)         
the value of each transaction referred to in
Article 6 shall be the taxable amount as defined in that Article; 
(c)         
the value of each transaction referred to in
Article 7 shall be ten per cent of the taxable amount as defined in that
Article;
(d)         
where the average annual value of financial
transactions in two consecutive calendar years does not exceed fifty per cent
of the overall average net annual turnover, as defined in Article 28 of
Directive 78/660/EEC, the undertaking, institution, body or person concerned
shall be entitled, upon request, to be considered as not being or no longer
being a financial institution.
Chapter II
Scope of the common system of FTT
Article 3
Scope
1.           This Directive shall apply
to all financial transactions, on the condition that at least one party to the
transaction is established in the territory of a participating Member State and
that a financial institution established in the territory of a participating
Member State is party to the transaction, acting either for its own account or
for the account of another person, or is acting in the name of a party to the
transaction.
2.           This Directive, with the
exception of paragraphs 3 and 4 of Article 10 and paragraphs 1 to 4 of Article
11, shall not apply to the following entities:
(a)         
Central Counter Parties (CCPs) where exercising
the function of a CCP;
(b)         
Central Securities Depositories (CSDs) and
International Central Securities Depositories (ICSDs) where exercising the
function of a CSD or ICSD;
(c)         
Member States, including public bodies entrusted
with the function of managing the public debt, when exercising that function. 
3.           Where an entity is not
taxable pursuant to paragraph 2, this shall not preclude the taxability of its
counterparty.
4.           This Directive shall not
apply to the following transactions:
(a)         
primary market transactions referred to in
Article 5(c) of Regulation (EC) No 1287/2006, including the activity of
underwriting and subsequent allocation of financial instruments in the
framework of their issue;
(b)         
transactions with the central banks of Member
States;
(c)         
transactions with the European Central Bank;
(d)         
transactions with the European Financial
Stability Facility and the European Stability Mechanism, transactions with the
European Union related to financial assistance made available under Article 143
of the TFEU and to financial assistance made available under Article 122(2) of
the TFEU, as well as transactions with the European Union and the European
Atomic Energy Community related to the management of their assets;
(e)         
without prejudice to point (c) and (d), transactions
with the European Union, the European Atomic Energy Community, the European
Investment Bank and with bodies set up by the European Union or the European
Atomic Energy Community to which the Protocol on the privileges and immunities
of the European Union applies, within the limits and under the conditions of
that Protocol, the headquarter agreements or any other agreements concluded for
the implementation of the Protocol;
(f)           
transactions with international organisations or
bodies, other than those referred to in points (c), (d) and (e), recognised as
such by the public authorities of the host State, within the limits and under
the conditions laid down by the international conventions establishing the
bodies or by headquarters agreements; 
(g)         
transactions carried out as part of
restructuring operations referred to in Article 4 of Council Directive
2008/7/EC[39].
Article 4
Establishment
1.           For the purposes of this
Directive, a financial institution shall be deemed to be established in the
territory of a participating Member State where any of the following conditions
is fulfilled: 
(a)         
it has been authorised by the authorities of
that Member State to act as such, in respect of transactions covered by that
authorisation;
(b)         
it is authorised or otherwise entitled to
operate, from abroad, as financial institution in regard to the territory of
that Member State, in respect of transactions covered by such authorisation or
entitlement;
(c)         
it has its registered seat within that Member State;
(d)         
its permanent address or, if no permanent
address can be ascertained, its usual residence is located in that Member State; 
(e)         
it has a branch within that Member State, in respect of transactions carried out by that branch;
(f)           
it is party, acting either for its own account
or for the account of another person, or is acting in the name of a party to
the transaction, to a financial transaction with another financial institution
established in that Member State pursuant to points (a), (b), (c), (d) or (e),
or with a party established in the territory of that Member State and which is
not a financial institution;
(g)         
it is party, acting either for its own account
or for the account of another person, or is acting in the name of a party to
the transaction, to a financial transaction in a structured product or one of
the financial instruments referred to in Section C of Annex I of Directive
2004/39/EC issued within the territory of that Member State, with the exception
of instruments referred to in points (4) to (10) of that Section which are not
traded on an organised platform.
2.           A
person which is not a financial institution shall be deemed to be
established within a participating Member State where any of the following
conditions is fulfilled: 
(a)         
its registered seat or, in case of a natural
person, its permanent address or, if no permanent address can be ascertained,
its usual residence is located in that State; 
(b)         
it has a branch in that State, in respect of
financial transactions carried out by that branch;
(c)         
it is party to a financial transaction in a structured
product or one of the financial instruments referred to Section C of Annex I to
Directive 2004/39/EC issued within the territory of that Member State, with the exception of instruments referred to in points (4) to (10) of that Section
which are not traded on an organised platform.
3.           Notwithstanding paragraphs
1 and 2, a financial institution or a person which is not a financial
institution shall not be deemed to be established within the meaning of those
paragraphs, where the person liable for payment of FTT proves that there is no
link between the economic substance of the transaction and the territory of any
participating Member State.
4.           Where more than one of the
conditions in the lists set out in paragraphs 1 and 2 respectively is
fulfilled, the first condition fulfilled from the start of the list in
descending order shall be relevant for determining the participating Member State of establishment.
Chapter III 
Chargeability, taxable amount and rates of the common FTT
Article 5
Chargeability of FTT
1.           The FTT shall become
chargeable for each financial transaction at the moment it occurs.
2.           Subsequent cancellation or
rectification of a financial transaction shall have no effect on chargeability,
except for cases of errors. 
Article 6
Taxable amount of the FTT in the case of financial transactions other than
those related to derivatives contracts
1.           In the case of financial
transactions other than those referred to in point 2(c) of Article 2(1) and, in
respect of derivative contracts, in points 2(a), 2(b) and 2(d) of Article 2(1),
the taxable amount shall be everything which constitutes consideration paid or
owed, in return for the transfer, from the counterparty or a third party.
2.           Notwithstanding
paragraph 1, in the cases referred to in that paragraph the taxable amount
shall be the market price determined at the time the FTT becomes chargeable:
(a)     where the consideration is lower than
the market price;
(b)     in the cases referred to in point 2(b)
of Article 2(1).
3.           For the purposes of
paragraph 2, the market price shall be the full amount that would have been
paid as consideration for the financial instrument concerned in a transaction
at arm's length.
Article 7
Taxable amount in the case of financial transactions related to derivatives
contracts
In the case of financial transactions
referred to in point 2(c) of Article 2(1) and, in respect of derivative
contracts, in points 2(a), 2(b) and 2(d) of Article 2(1), the taxable amount of
the FTT shall be the notional amount referred to in the derivatives contract at
the time of the financial transaction. 
Where more than one notional amount is
identified, the highest amount shall be used for the purpose of determining the
taxable amount. 
Article 8
Common provisions on taxable amount
For the purposes of Articles 6 and 7, where
the value relevant for the determination of the taxable amount is expressed, in
whole or in part, in a currency other than that of the taxing participating
Member State, the applicable exchange rate shall be the latest selling rate
recorded, at the time the FTT becomes chargeable, on the most representative
exchange market of the participating Member State concerned, or at an exchange
rate determined by reference to that market, in accordance with the rules laid
down by that Member State. 
Article 9
Application, structure and level of rates
1.           The participating Member
States shall apply the rates of FTT in force at the time when the tax becomes
chargeable.
2.           The rates shall be fixed
by each participating Member State as a percentage of the taxable amount.
Those rates shall not be lower than: 
(a)         
0.1% in respect of the financial transactions
referred to in Article 6; 
(b)         
0.01% in respect of financial transactions
referred to in Article 7.
3.           The participating Member
States shall apply the same rate to all financial transactions that fall under
the same category pursuant to points (a) and (b) of paragraph 2.
Chapter IV
Payment of the common FTT, related obligations and prevention of evasion,
avoidance and abuse
Article 10
Person liable for payment of FTT to the tax authorities
1.           In respect of each
financial transaction, FTT shall be payable by each financial institution which
fulfils any of the following conditions: 
(a)         
it is party to the transaction, acting either
for its own account or for the account of another person;
(b)         
it is acting in the name of a party to the
transaction; 
(c)         
the transaction has been carried out on its
account.
The FTT shall be payable to the tax authorities
of the participating Member State in the territory of which the financial
institution is deemed to be established.
2.           Where a financial
institution acts in the name or for the account of another financial
institution only that other financial institution shall be liable to pay FTT.
3.           Where the tax due has not
been paid within the time limit set out in Article 11(5), each party to a
transaction, including persons other than financial institutions shall be jointly
and severally liable for the payment of the tax due by a financial institution
on account of that transaction.
4.           The participating Member
States may provide that a person other than the persons liable for payment of
FTT referred to in paragraphs 1, 2 and 3 is to be held jointly and severally
liable for the payment of the tax.
Article 11
Provisions relating to time limits for the payment of FTT, to obligations
intended to ensure payment, to the verification of payment
1.           The participating Member
States shall lay down registration, accounting, reporting obligations and other
obligations intended to ensure that FTT due is effectively paid to the tax
authorities.
2.           The
Commission may, in accordance with Article 16 adopt delegated acts specifying
the measures to be taken pursuant to paragraph 1 by the participating Member
States.
3.           The participating Member
States shall adopt measures to ensure that every person liable for payment of
FTT submits to the tax authorities a return setting out all the information
needed to calculate the FTT that has become chargeable during a period of one
month including the total value of the transactions taxed at each rate. 
The FTT return shall be submitted by the tenth day of the month following the
month during which the FTT became chargeable.
4.           The participating Member
States shall ensure that financial institutions keep at the disposal of the tax
authorities, for at least five years, the relevant data relating to all
financial transactions which they have carried out, whether in their own name
or in the name of another person, for their own account or for the account of
another person.
In specifying that obligation they shall take account, where applicable, of
obligations they have already imposed on financial institutions in view of Article
25(2) of Directive 2004/39/EC.
5.           The participating Member
States shall ensure that any FTT due is paid to the accounts determined by the
participating Member States at the following points in time:
(a)         
at the moment when the tax becomes chargeable in
case the transaction is carried out electronically;
(b)         
within three working days from the moment the
tax becomes chargeable in all other cases.
The Commission may adopt implementing acts
providing for uniform methods of collection of the FTT due. Those implementing
acts shall be adopted in accordance with the examination procedure referred to
in Article 18(2).
6.           The participating Member
States shall ensure that the tax authorities verify whether the tax has been
correctly paid. 
Article 12
Prevention of fraud and evasion
The participating Member States shall adopt
measures to prevent tax fraud and evasion.
Article 13
General anti-abuse rule
1.           An artificial arrangement
or an artificial series of arrangements which has been put into place for the
essential purpose of avoiding taxation and leads to a tax benefit shall be
ignored. Participating Member States shall treat these arrangements for tax
purposes by reference to their economic substance.
2.           For the purposes of
paragraph 1 an arrangement means any transaction, scheme, action, operation,
agreement, grant, understanding, promise, undertaking or event. An arrangement
may comprise more than one step or part.
3.           For the purposes of
paragraph 1 an arrangement or a series of arrangements is artificial where it
lacks commercial substance. In determining whether the arrangement or series of
arrangements is artificial, participating Member States shall consider, in
particular, whether they involve one or more of the following situations:
(a)         
the legal characterisation of the individual
steps which an arrangement consists of is inconsistent with the legal substance
of the arrangement as a whole;
(b)         
the arrangement or series of arrangements is
carried out in a manner which would not ordinarily be employed in what is
expected to be a reasonable business conduct;
(c)         
the arrangement or series of arrangements
includes elements which have the effect of offsetting or cancelling each other;
(d)         
transactions concluded are circular in nature;
(e)         
the arrangement or series of arrangements
results in a significant tax benefit but this is not reflected in the business
risks undertaken by the taxpayer or its cash flows.
4.           For the purposes of
paragraph 1, the purpose of an arrangement or series of arrangements consists
in avoiding taxation where, regardless of any subjective intentions of the
taxpayer, it defeats the object, spirit and purpose of the tax provisions that
would otherwise apply.
5.           For the purposes of
paragraph 1, a given purpose is to be considered essential where any other
purpose that is or could be attributed to the arrangement or series of
arrangements appears at most negligible, in view of all the circumstances of
the case.
6.           In determining whether an
arrangement or series of arrangements has led to a tax benefit as referred to
in paragraph 1, participating Member States shall compare the amount of tax due
by a taxpayer, having regard to those arrangement(s), with the amount that the
same taxpayer would owe under the same circumstances in the absence of the
arrangement(s). 
Article 14
Abuse in the case of depositary receipts and similar securities
1.           Without prejudice to
Article 13, a depositary receipt or similar security issued with the essential
purpose of avoiding tax on transactions in the underlying security issued in a
participating Member State shall be considered issued in that participating Member State, in case a tax benefit would otherwise arise.
2.           For the purposes of
paragraph 1, paragraphs 4, 5 and 6 of Article 13 shall apply.
3.           In applying paragraph 1, regard
shall be had to the extent to which trade in the depositary receipt or similar
security has replaced trade in the underlying security. Where such replacement
has occurred to a significant extent, it shall be for the person liable for
payment of FTT to demonstrate that the depositary receipt or similar security
was not issued with the essential purpose of avoiding tax on transactions in
the underlying security.
Chapter V
Final provisions
Article 15
Other taxes on financial transactions
The participating Member States shall not
maintain or introduce taxes on financial transactions other than the FTT object
of this Directive or value-added tax as provided for in Council Directive
2006/112/EC[40].
Article 16
Exercise of the delegation
1.           The power to adopt
delegated acts is conferred on the Commission subject to the conditions laid
down in this Article.
2.           The delegation of powers
referred to in Article 11(2) shall be conferred for an indeterminate period of
time from the date referred to in Article 19. 
3.           The delegation of power
referred to in Article 11(2) may be revoked at any time by the Council. A
decision of revocation shall put an end to the delegation of the power
specified in that decision. It shall take effect the day following the
publication of the decision in the Official Journal of the European Union or at
a later date specified therein. It shall not affect the validity of the
delegated acts already in force.
4.           As soon as it adopts a
delegated act, the Commission shall notify it to the Council.
5.           A delegated act adopted
pursuant to Article 11(2) shall enter into force only if no objection has been
expressed by the Council within a period of 2 months of notification of that
act to the Council or if, before the expiry of that period, the Council has
informed the Commission that it will not object. That period shall be extended
by 2 months at the initiative of the Council.
Article 17
Information of the European Parliament
The European Parliament shall be informed
of the adoption of delegated acts by the Commission, of any objection
formulated to them, or of the revocation of the delegation of powers by the
Council.
Article 18
Committee procedure
1.           The Commission shall be
assisted by a committee. That committee shall be a committee within the meaning
of Regulation (EU) No 182/2011
2.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.
Article19
Review clause 
Every five years and for the first time by
31 December 2016, the Commission shall submit to the Council a report on the
application of this Directive, and, where appropriate, a proposal. 
In that report the Commission shall, at
least, examine the impact of the FTT on the proper functioning of the internal
market, the financial markets and the real economy and it shall take into
account the progress on taxation of the financial sector in the international
context.
Article20
Transposition 
1.           The participating Member
States shall adopt and publish, by 30 September 2013 at the latest, the laws,
regulations and administrative provisions necessary to comply with this
Directive. They shall forthwith communicate to the Commission the text of those
provisions. 
They shall apply those provisions from 1
January 2014. 
When the participating Member States adopt
those provisions, they shall contain a reference to this Directive or be
accompanied by such a reference on the occasion of their official publication.
The participating Member States shall determine how such reference is to be
made.
2.           The participating Member
States shall communicate to the Commission the text of the main provisions of
national law which they adopt in the field covered by this Directive.
Article 21
Entry into force
This
Directive shall enter into force on the twentieth day following that of its
publication in the Official Journal of the European Union.
Article 22
Addressees
This
Directive is addressed to the participating Member States.
Done at Brussels, 
                                                                       For
the Council
                                                                       The
President
ANNEX 
LEGISLATIVE FINANCIAL
STATEMENT 
1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE 
1.1.        Title of the
proposal/initiative 
 Council Directive implementing enhanced cooperation in the area of financial transaction tax 
1.2.        Policy area(s) concerned
in the ABM/ABB structure
 14 05 Taxation Policy 
1.3.        Nature of the
proposal/initiative 
 The proposal relates to a new action 
1.4.        Objective(s) 
1.4.1.     The
Commission's multiannual strategic objective targeted by the proposal
 Financial stability 
1.4.2.     Specific objectives and
ABM/ABB activity(ies) concerned
 Specific Objective No.3 To develop new tax initiatives and actions to support EU policy objectives ABM/ABB activity(ies) concerned Title 14 Taxation and Customs Union; ABB 05 Taxation Policy 
1.4.3.     Expected
result(s)
 To avoid fragmentation in the internal market for financial services, bearing in mind the increasing number of uncoordinated national tax measures being put in place. To ensure that financial institutions make a fair and substantial contribution to covering the costs of the recent crisis, and to ensure even taxation of the sector vis-à-vis other sectors. To create appropriate disincentives for transactions which do not enhance welfare or the efficiency of financial markets and to complement regulatory measures aimed at avoiding future crisis. 
1.5.        Grounds for the proposal/initiative
1.5.1.     Requirement(s) to be met in
the short or long term
 Contribute to the overall objective of stability in the EU in the aftermath of the financial crisis 
1.5.2.     Added
value of EU involvement
 A fragmentation of financial markets across activities and across borders can only be avoided and equal treatment of financial institutions in the EU and, ultimately, the proper functioning of the internal market, can only be ensured through action at EU level if necessary through enhanced cooperation. 
1.5.3.     Lessons
learned from similar experiences in the past
 Introducing a broad-based FTT at national level achieving the three above objectives without serious delocalisation effects has proven to be hardly possible (example of Sweden)". 
1.5.4.     Coherence
and possible synergy with other relevant instruments
 Taxes are part of the global resolution framework. Levying FTT would facilitate efforts of budgetary consolidation in the participating Member States. Moreover, the Commission has proposed to use part of the proceeds of the FTT as a future own resource – if they were to be used for financing EU budget, the participating Member States would see their GNI-based national contributions reduced. 
1.6.        Duration and financial
impact 
 Proposal of unlimited duration 
1.7.        Management method(s)
envisaged
N/A.
2.           Management measures
2.1.        Monitoring and reporting
rules 
 Participating Member States must take appropriate measures for FTT to be levied accurately and timely, which includes measures of verification. The provision of appropriate measures to ensure payment of the tax and to monitor and verify correct payment is left to participating Member States. 
2.2.        Management and control
system 
2.2.1.     Risk(s) identified
 1. Delays in the transposition of the Directive at participating Member States' level 2.Risk of evasion, avoidance and abuse 3. Risk of relocation 
2.2.2.     Control method(s) envisaged

 Article 11 of the Directive mentions the specific provisions relating to the prevention of evasion, avoidance and abuse: delegated acts and administrative cooperation in tax matters. The risks of relocation are tackled by the choice of an appropriate set of tax rates and a broad definition of the taxable base. 
2.3.        Measures to prevent fraud
and irregularities 
Specify existing or envisaged prevention
and protection measures.
3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE 
3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected
·      Existing expenditure budget lines 
In order of
multiannual financial framework headings and budget lines.
 Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution 
 Number [Description………….] || Diff./non-diff ([41]) || from EFTA[42] countries || from candidate countries[43] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation 
   || [XX.YY.YY.YY]   || Diff./non-diff. || YES/NO || YES/NO || YES/NO || YES/NO 
·      New budget lines requested 
In order of
multiannual financial framework headings and budget lines.
 Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution 
 Number [Heading…………..] || Diff./non-diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation 
   || [XX.YY.YY.YY]   ||   || YES/NO || YES/NO || YES/NO || YES/NO 
3.2.        Estimated impact on
expenditure 
3.2.1.     Summary of estimated impact
on expenditure 
EUR million (to 3 decimal places)
 Heading of multiannual financial framework: || Number || [Heading ……………...…………………………………………….] 
 DG: <…….> ||   ||   || Year N[44] || Year N+1 || Year N+2 || Year N+3 || … enter as many years as necessary to show the duration of the impact (see point 1.6) || TOTAL 
  Operational appropriations ||   ||   ||   ||   ||   ||   ||   ||   
 Number of budget line || Commitments || (1) ||   ||   ||   ||   ||   ||   ||   ||   
 Payments || (2) ||   ||   ||   ||   ||   ||   ||   ||   
 Number of budget line || Commitments || (1a) ||   ||   ||   ||   ||   ||   ||   ||   
 Payments || (2a) ||   ||   ||   ||   ||   ||   ||   ||   
 Appropriations of an administrative nature financed from the envelope for specific programmes[45] ||   ||   ||   ||   ||   ||   ||   ||   
 Number of budget line ||   || (3) ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL appropriations for DG <…….> || Commitments || =1+1a +3 || N/A || N/A || N/A || N/A || N/A || N/A || N/A || N/A 
 Payments || =2+2a +3 || N/A || N/A || N/A || N/A || N/A || N/A || N/A || N/A 
  TOTAL operational appropriations || Commitments || (4) || N/A || N/A || N/A || N/A || N/A || N/A || N/A || N/A 
 Payments || (5) || N/A || N/A || N/A || N/A || N/A || N/A || N/A || N/A 
  TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL appropriations under HEADING <….> of the multiannual financial framework || Commitments || =4+ 6 || N/A || N/A || N/A || N/A || N/A || N/A || N/A || N/A 
 Payments || =5+ 6 || N/A || N/A || N/A || N/A || N/A || N/A || N/A || N/A 
If more than one heading is affected by the proposal /
initiative:
  TOTAL operational appropriations || Commitments || (4) ||   ||   ||   ||   ||   ||   ||   ||   
 Payments || (5) ||   ||   ||   ||   ||   ||   ||   ||   
  TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL appropriations under HEADINGS 1 to 4 of the multiannual financial framework (Reference amount) || Commitments || =4+ 6 || N/A || N/A || N/A || N/A || N/A || N/A || N/A || N/A 
 Payments || =5+ 6 || N/A || N/A || N/A || N/A || N/A || N/A || N/A || N/A 
 Heading of multiannual financial framework: || 5 || " Administrative expenditure " 
EUR million (to 3 decimal places)
   ||   || Year 2013 || Year 2014 || Year 2015 || Year 2016 || From 2017 onwards 
 DG: TAXUD || 
  Human resources || 0.254 || 0.762 || 0.762 || 0.762 || 0.762 
  Other administrative expenditure || 0.040 || 0.036 || 0.036 || 0.036 || 0.036 
 TOTAL DG TAXUD ||   || 0.294 || 0.798 || 0.798 || 0.798 || 0.798 
 TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 0.294 || 0.798 || 0.798 || 0.798 || 0.798 
EUR million (to 3 decimal places)
   ||   || Year 2013 || Year 2014 || Year 2015 || Year 2016 || From 2017 onwards 
 TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 0.294 || 0.798 || 0.798 || 0.798 || 0.798 
 Payments || 0.294 || 0.798 || 0.798 || 0.798 || 0.798 
3.2.2.     Estimated impact on
operational appropriations 
–     
X  The
proposal/initiative does not require the use of operational appropriations
3.2.3.     Estimated impact on
appropriations of an administrative nature
3.2.3.1.  Summary 
–     
X  The
proposal/initiative requires the use of administrative appropriations, as
explained below:
EUR million (to 3
decimal places)
   || Year 2013 || Year 2014 || Year 2015 || Year 2016 || From 2017 onwards 
                
 HEADING 5 of the multiannual financial framework ||   ||   ||   ||   ||   
 Human resources || 0.254 || 0.762 || 0.762 || 0.762 || 0.762 
 Other administrative expenditure || 0.040 || 0.036 || 0.036 || 0.036 || 0.036 
 Subtotal HEADING 5 of the multiannual financial framework || 0.294 || 0.798 || 0.798 || 0.798 || 0.798 
 Outside HEADING 5[46] of the multiannual financial framework ||   ||   ||   ||   ||   
 Human resources ||   ||   ||   ||   ||   
 Other expenditure of an administrative nature ||   ||   ||   ||   ||   
 Subtotal outside HEADING 5 of the multiannual financial framework || N/A || N/A || N/A || N/A || N/A 
 TOTAL || 0.294 || 0.798 || 0.798 || 0.798 || 0.798 
3.2.3.2.  Estimated requirements of
human resources 
–     
X  The
proposal/initiative requires the use of human resources, as explained below:
   || Year 2013 || Year 2014 || Year 2015 || Year 2016 || From 2017 onwards 
  Establishment plan posts (officials and temporary agents) ||   ||   ||   ||   ||   
 14 01 01 01 (Headquarters and Commission’s Representation Offices) || 0.254 || 0.762 || 0.762 || 0.762 || 0.762 
 14 01 01 02 (Delegations) || p.m. || p.m. || p.m. || p.m. || p.m. 
 14 01 05 01 (Indirect research) || p.m. || p.m. || p.m. || p.m. || p.m. 
 10 01 05 01 (Direct research) || p.m. || p.m. || p.m. || p.m. || p.m. 
  External personnel (in Full Time Equivalent unit: FTE)[47] ||   ||   ||   ||   ||   
 14 01 02 01 (CA, INT, SNE from the "global envelope") || p.m. || p.m. || p.m. || p.m. || p.m. 
 14 01 02 02 (CA, INT, JED, LA and SNE in the delegations) || p.m. || p.m. || p.m. || p.m. || p.m. 
 XX 01 04 yy [48] || - at Headquarters[49] || p.m. || p.m. || p.m. || p.m. || p.m. 
 - in delegations || p.m. || p.m. || p.m. || p.m. || p.m. 
 XX 01 05 02 (CA, INT, SNE - Indirect research) || p.m. || p.m. || p.m. || p.m. || p.m. 
 10 01 05 02 (CA, INT, SNE - Direct research) || p.m. || p.m. || p.m. || p.m. || p.m. 
 Other budget lines (specify) ||   ||   ||   ||   ||   
 TOTAL || 0.254 || 0.762 || 0.762 || 0.762 || 0.762 
Estimate to be expressed in full amounts
(or at most to one decimal place)
14 is the
policy area or budget title concerned.
The human resources required will be met by
staff from the DG who are already assigned to management of the action and/or
have been redeployed within the DG, together if necessary with any additional
allocation which may be granted to the managing DG under the annual allocation
procedure and in the light of budgetary constraints.
Description of tasks to be carried out:
 Officials and temporary agents || The current staff allocation of DG TAXUD does not really take the total issue of a common system of FTT into account and will require internal redeployment. Main tasks of the assigned officials will be: to elaborate the technicalities on the practical functioning of the tax so as to help the negotiation process, monitor the subsequent implementation, prepare legal interpretations and working documents, contribute to the delegated acts among others on anti-avoidance/anti-abuse provisions, prepare infringement procedures as appropriate etc. 
3.2.4.     Compatibility with the
current multiannual financial framework 
–     
X  Proposal/initiative
is compatible the current multiannual financial framework.
3.2.5.     Third-party contributions 
–     
The proposal/initiative does not provide for
co-financing by third parties 
3.3.        Estimated impact on
revenue 
–     
X  Proposal/initiative
as such has no financial impact on revenue. However, if parts of the proceeds
of the FTT were to be used as an own resource, thus reducing the residual
GNI-based own resource drawn from the participating Member States, the
composition of the revenue sources would be impacted.
[1]               COM(2011) 594 final.
[2]               Financial institutions, either directly or
indirectly, largely benefited from the rescue and guarantee operations
(pre-)financed by the European taxpayer in the course of 2008 to 2012. These
operations, together with the faltering of economic activity caused by the
spread of uncertainty about the stability of the overall economic and financial
system have triggered a deterioration in the public finance balances across Europe by more than 20% of GDP. Also, most financial and insurance services are exempted
from VAT.
[3]               P7_TA-(2012)0217.
[4]               ECO/321 – CESE 818/2012 (OJ C 181, 21.06.2012, p.
55).
[5]               CDR 332/2011 (OJ C 113, 18.04.2012, p. 7).
[6]               FTT was first on the agenda of the Council on
Economic and Financial Affairs on 8 November 2011 and then at three subsequent
meetings in March, June and July 2012. From December 2011 to June 2012 seven
Council Working Party meetings on Tax Questions – Indirect taxation were
devoted to the subject.
[7]               COM(2012) 631 final/2.
[8]               COM(2011)
510 final.
http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/proposal_council_own_resources_en.pdf
[9]               COM(2011) 739 final.
                http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/COM_2011_0739_EN.pdf
[10]             OJ L 46, 21.2.2008, p.11.
[11]             http://ec.europa.eu/taxation_customs/taxation/other_taxes/financial_sector/index_en.htm.
[12]             O.J.L 22, 25.1.2013, p.11.
[13]             Reference is made to the definition of financial
instruments in Annex I to Directive 2004/39/EC of the
European Parliament and of the Council of 21 April 2004 on markets in financial
instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive
2000/12/EC of the European Parliament and of the Council and repealing Council
Directive 93/22/EEC (OJ L 145, 30.4.2004, p. 1). This
definition covers units in collective investment undertakings. Consequently,
shares and units of undertakings for collective investment in transferable
securities (UCITS) as defined in Article 1(2) of Directive 2009/65/EC (OJ L
302, 17.11.2009, p. 32) and alternative investment funds (AIF) as
defined in Article 4(1)(a) of Directive 2011/61/EU (OJ L 174, 1.7.2011, p. 1)
are financial instruments. 
[14]             Notably Directive 2004/39/EC (cf. previous footnote).
[15]             OJ L 338, 12.12.2012, p. 41.
[16]             OJ
L 64, 11.3.2011, p. 1.
[17]             OJ
L 84, 31.3.2010, p. 1.
[18]             With certain exceptions in the case of Directive
2011/16/EU but which are no relevant here.
[19]                http://www.oecdilibrary.org/docserver/download/fulltext/2311331e.pdf?expires=1309623132&id=id&accname=ocid194935&checksum=37A9732331E7939B3EE154BB7EC53C41

[20]             OJ L 347, 11.12.2006, p. 1.
[21]             COM(2011)
510 final.
http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/proposal_council_own_resources_en.pdf
[22]             COM(2011) 739 final.
                http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/COM_2011_0739_EN.pdf
[23]               OJ L 22, 25.1.2013, p. 11
[24]               OJ C …, …, p.. .
[25]               OJ C …, …, p. ..
[26]               OJ L 46, 21.2.2008, p.11.
[27]               OJ L 55, 28.2.2011, p. 13
[28]               OJ L 145, 30.4.2004, p. 1.
[29]               OJ L 241, 2.9.2006, p.1.
[30]               OJ L 177, 30.6.2006, p. 201.
[31]               OJ L 177, 30.6.2006, p. 1.
[32]             OJ L 335, 17.12.2009, p. 1.
[33]             OJ L 302, 17.11.2009, p. 32.
[34]             OJ L 235, 23.9.2003, p. 10.
[35]             OJ L 174, 1.7.2011, p.1.
[36]             OJ L 222, 14.8.1978, p. 11.
[37]             OJ L 201, 27.7.2012, p.1.
[38]             OJ L 166, 11.6.1998, p. 45.
[39]             OJ L OJ L 46, 21.2.2008, p.11.
[40]             OJ L 347, 11.12.2006, p. 1.
[41]               Diff. = Differentiated appropriations / Non-Diff. =
Non-differentiated appropriations.
[42]               EFTA: European Free Trade Association. 
[43]               Candidate countries and, where applicable, potential
candidate countries from the Western Balkans.
[44]               Year N is the year in which implementation of the
proposal/initiative starts.
[45]               Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.
[46]               Technical and/or administrative assistance and expenditure
in support of the implementation of EU programmes and/or actions (former
"BA" lines), indirect research, direct research.
[47]               CA= Contract Agent; INT= agency staff ("Intérimaire");
JED= "Jeune Expert en Délégation" (Young Experts in
Delegations); LA= Local Agent; SNE= Seconded National Expert.
[48]               Under the ceiling for external personnel from
operational appropriations (former "BA" lines).
[49]               Essentially for Structural Funds, European
Agricultural Fund for Rural Development (EAFRD) and European Fisheries Fund
(EFF).