CELEX: 52011PC0594
Language: en
Date: 2011-09-28
Title: Proposal for a COUNCIL DIRECTIVE on a common system of financial transaction tax and amending Directive 2008/7/EC

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		52011PC0594
		
			Proposal for a COUNCIL DIRECTIVE on a common system of financial transaction tax and amending Directive 2008/7/EC /* COM/2011/0594 final - 2011/0261 (CNS) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
1.1.        Introduction: Financial
and economic crisis context, policy goals and need to ensure the proper
functioning of the internal market
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. The purpose of this proposal is to provide a common European approach
to this issue that is consistent with the internal market. The present proposal aims at complementing the EU regulatory
framework for safer financial services by addressing particularly risky behaviour
in some segments of financial markets so as to avoid the repetition of past
practices.
The European Commission already explored
the idea of implementing a FTT in its Communication of 7 October 2010 on
Taxation of the Financial Sector[1].
In view of the analysis carried out by the Commission, and also in response to
the numerous calls of the European Council[2],
the European Parliament[3]
and the Council, the present proposal is a first step:
–                        
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 contribution to covering the costs of the recent crisis and to ensure a
level playing field with other sectors from a taxation point of view[4];
–                        
to create appropriate disincentives for
transactions that do not enhance the efficiency of
financial markets thereby complementing regulatory measures aimed at avoiding
future crises.
Given the extremely high mobility of most
of the transactions to be potentially taxed, it 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 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. 
This proposal therefore provides for harmonisation of Member States’
taxes on financial transactions to ensure the smooth functioning of the single
market. 
In line with the Commission Proposal for a Council Decision on the system of own resources of
the European Union of 29 June 2011[5],
this proposal also aims at creating a new revenue stream
with the objective to gradually displace national contributions to the EU budget, leaving
a lesser burden on national treasuries.
1.2.        The financing of the EU
Budget 
The issue of financial sector taxation was also part of the
Commission Communication on the EU Budget Review of 19 October 2010[6] which states that “The
Commission considers that the following non-exclusive list of financing means
could be possible candidates for own resources to gradually displace national
contributions, leaving a lesser burden on national treasuries: - EU taxation of
the financial sector.” The subsequent Proposal for a Council Decision on the
system of own resources of the European Union of 29 June 2011[7] identified a FTT as a
new own resource to be entered in the budget of the EU. Consequently, this
proposal will be complemented by separate own resource proposals setting out
how the Commission proposes that the FTT will serve as a source for the EU
budget.
1.3.        Regulatory context
The European Union is in the midst of an ambitious
regulatory reform programme in the financial services sector. Before the end of
this year the Commission will have proposed all the main necessary elements for
a fundamental improvement of the way Europe's financial markets are regulated
and supervised. The EU
financial services reform is oriented around four strategic objectives, namely
improving the supervision of the financial sector; strengthening financial
institutions, and providing a framework for their recovery where necessary;
making financial markets safer and more transparent; and increasing the
protection of consumers of financial services. It is expected that this
wide-reaching reform will bring back the financial services sector at the
service of the real economy, in particular to finance growth. The FTT proposal
is intended to complement these regulatory reforms.
1.4         International context
The present proposal also substantially contributes
to the ongoing international debate on financial sector taxation and in
particular to the development of a FTT at global level. In order to best
minimise risks, a coordinated approach at international level is the best
option. The present proposal demonstrates how an effective FTT can be designed
and implemented, generating significant revenue. This should pave the way
towards a coordinated approach with the most relevant international partners. 
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
2.1.        External consultation and
expertise
The present 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.
The results of the consultation process and
the external input are reflected in the impact assessment.
2.2.        Impact assessment
The impact assessment accompanying the
present proposal analyses the impacts of additional taxes on the financial
sector with regard to the objectives of (1) ensuring a contribution of the
financial sector to public finances, (2) limiting the undesirable market
behaviour and thereby stabilising markets and (3) avoiding distortions on the
internal market. The impact assessment analysed two basic options: a financial
transaction tax (FTT) and a financial activities tax (FAT), as well as the
numerous design options related to them, and concluded that an FTT was the
preferred option.
The FTT appears to have the potential for
raising significant tax revenues from the financial sector, but, like the FAT,
it also risks some negative effects in terms of GDP and reduction in the market
volume of transactions. In order to avoid risks of delocalisation a co-ordinated
approach is needed both at EU level to avoid fragmentation of the Single Market
and at international level, in line with the ambitions for G-20 co-operation. 
Furthermore, in order to respond to the
risks in terms of market reaction and impact on growth, the design of the FTT
contains specific mitigating design features with respect to the economic
effects and incidence of the tax, possible avoidance strategies and relocation
risks:
·                        
a broadly defined tax scope as regards products,
transactions, types of trade and financial actors as well as transactions carried out inside a financial group;
·                        
the use of the residence principle – taxation in
a Member State of establishment of financial actors, independent from the
location of the transactions. The directive also provides for the taxation in the EU, in case a non-EU financial institution is
involved in a financial transaction with a party in the EU, and in case one of
its branches in the EU is involved in a financial transaction;
·                        
the setting of tax rates at an appropriate level
to minimise eventual impacts on the cost of capital for non-financial
investment purposes;
·                        
the exclusion from the
scope of the FTT of transactions on primary markets both for securities (shares, bonds) – so as not to
undermine the raising of capital by governments and companies – and for currencies.
This exclusion of primary markets is consistent with a longstanding EU policy practice
as also enshrined in Directive 2008/7/EC;
·                        
ring-fencing of the lending and borrowing
activities of private households, enterprises or financial institutions, and
other day-to-day financial activities, such as mortgage lending or payment
transactions;
·                        
the exclusion of financial transactions for
example with the European Central Bank (ECB) and with national central banks,
from the scope of the FTT, so that the directive will not affect the
refinancing possibilities of financial institutions or the instruments of monetary
policy.
Taking into account the mitigating measures
provided by the design features of the FTT actually proposed, the negative impact
on the GDP level in the long run is expected to be limited to around 0.5% as compared to the baseline scenario. 
The impact assessment shows that the FTT will
impact market behaviour and business models within the financial sector.
Automated Trading in financial markets could be affected by a tax-induced
increase in transaction costs, so that these costs would erode the marginal
profit. This would especially hold for the business model of high-frequency
trading physically closely linked to the trading platforms on which financial
institutions undertake numerous high-volume but low-margin transactions. These
might have to be replaced by algorithms that trigger less numerous but
higher-margin transactions (before the tax).
The impact assessment also shows that a FTT
will have progressive distributional effects, i.e. its impact will increase
proportionately with income, as higher income groups benefit more from the
services provided by the financial sector. This holds especially for a FTT
limited to transactions with financial instruments such as bonds and shares and
derivatives thereof. Private households and SMEs not actively investing in
financial markets would hardly be affected by this proposal thanks to the ring-fencing
features built in the design of the FTT.
The geographical distribution of the
tax revenue depends on the technical design of the tax. Under this
Directive the geographical spread will depend on the place of establishment of
the financial institutions involved in financial transactions and not on the
place of trade of financial instruments. This is likely to result in a
lower degree of concentration of the tax revenue, especially for situations
where financial institutions intervene on a trading platform on behalf of
financial institutions established in another Member State.
The directive also ensures that specific
measures to address avoidance, evasion and abuse are defined at the level of
the Member States and of the Union through delegated acts. A review clause will
allow, after three years of implementation, to examine the impact of the FTT on
the proper functioning of the internal market, the financial markets and the
real economy, taking into account the progress on taxation of the financial
sector in the international context.
3.           LEGAL ELEMENTS OF THE PROPOSAL
3.1.        Legal basis
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. 
3.2.        Subsidiarity and
proportionality
A uniform definition at EU level of the
essential features of a FTT is necessary to avoid undue relocations of
transactions and market participants and substitution of financial instruments
within the EU. In other words, a uniform definition at EU level is necessary to
ensure the proper functioning of the internal market and avoid distortions of
competition within the EU. 
By the same token, a uniform definition at
EU level 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. 
This is supported by empiric evidence.
National taxes on financial transactions so far either resulted in
delocalisation of activities and/or institutions or were, so as to avoid this,
designed in a way that they were levied on relatively immobile tax bases only,
leaving close substitutes often untaxed. Harmonisation of key concepts and coordination
of implementation at EU level are thus a prerequisite for an application of
financial transaction taxes to be successful and to avoid distortions. Such EU
action will also foster the desirable approach.
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 Member States
when it comes to the actual setting of the tax rates above the minimum and the
specification of accounting and reporting obligations as well as prevention of
evasion, avoidance and abuse.
A common framework for an FTT in the EU
therefore respects the subsidiarity and proportionality principle a 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.
The harmonisation proposed, in 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,
scope and definitions)
This chapter defines the essential
framework of the proposed FTT in the EU. 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 UCITS and alternative
investment funds[8])
and derivatives agreements. Furthermore, the scope of the tax is not limited to
trade in organised markets, such as regulated markets, multilateral trading
facilities, 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 financial
institution involved assumes the risk implied by a given financial instrument
("purchase and sale"). Also, where a
derivatives agreement results in a supply of financial instruments, in addition
to the taxable derivatives agreement the financial instruments supply is also
subject to tax, provided that all other conditions for taxation are fulfilled. 
Transactions with the European Central Bank
and national central banks are however excluded from the scope so as to avoid
any negative impact on the refinancing possibilities of financial institutions
or on monetary policies in general. 
In particular, for both the financial
instruments whose purchase, sale and transfer is taxed and for the conclusion
or modification of derivatives agreements, the relevant regulatory framework at
EU level provides a clear, comprehensive and accepted set of definitions[9]. As regards more particularly
the derivative agreements thus referred to, these concern derivatives for
investment purposes. It emerges from the definitions used that spot currency
transactions are not taxable financial transactions, while currency derivative
agreements are. Derivative contracts relating to commodities are also covered,
while physical commodity transactions are not.
Financial transactions can also consist of
the purchase/sale or transfer of structured products, meaning tradable securities or other financial instruments offered by way of
a securitisation. 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 notes,
warrants and certificates as well as banking securitisations which usually
transfer 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 underwriting. 
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 this
is usually evident via respective entries in the books. 
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 persons carrying out
certain financial activities on a significant basis should be considered as
financial institutions.
The proposed Directive provides for
delegated powers as regards further details.
Central Counterparties (CCPs), Central
Securities Depositories (CSDs) and International Central Securities
Depositories (ICSDs) are not considered financial institutions in as much as
these are exercising functions which are not considered to be trading activity
in itself. They are also key for a more efficient and more transparent
functioning of financial markets.
The territorial application of the proposed
FTT and the Member States’ taxing rights are defined on the basis of the
residence principle. In order for a financial transaction to be taxable in the
EU, one of the parties to the transaction needs to be established in the
territory of a Member State. Taxation will take place in the 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 party to the transaction. 
In case these establishments of the
different financial institutions, parties to the transaction or acting in the
name of such parties, are located in the territory of different Member States
these different Member States will be competent to subject the transaction to
tax at the rates they have set in accordance with this proposal. Where the
establishments concerned are located in the territory of a State which is not
part of the Union the transaction is not subject to FTT in the EU, unless one
of the parties to transaction is established in the EU in which case the
third-country financial institution will also be deemed to be established and
the transaction becomes taxable in the Member State concerned. Where
transactions are carried out on trade venues outside the EU, they will be
subject to tax if at least one of the establishments carrying out or
intervening in the transaction is located in the EU. 
However, in case the person liable to pay
the tax was able to prove that there is no link between the economic substance
of the transaction and the territory of any Member State, the financial
institution may not be considered established within a Member State. 
Furthermore, where financial instruments
whose purchase and sale is taxable form the object of a transfer between
entities of a group, this transfer shall be taxable even though it might not be
a purchase or sale. 
It follows from the foregoing that many
financial activities are not considered to be financial transactions in the
logic of the FTT which follows the above-mentioned objectives. 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 FTT. This is
the case for the conclusion of insurance contracts, mortgage lending, consumer
credits, payment services etc. (though the subsequent trading of these via
structured products is included). Also, currency transactions on spot markets
are outside the scope FTT, which preserves the free movement of capital. However,
derivatives agreements based on currency transactions are covered by FTT since
they are not as such currency transactions.
3.3.2.     Chapter II (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 the purchase/sale or transfer of certain
financial instruments (excluding derivatives), on the one hand, and the purchase/sale,
transfer, conclusion or modification of derivatives agreements, on the other
hand, have a different nature and characteristics, they have to be associated
to different taxable amounts. 
For the purchase and sale of certain
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. 
For the purchase/sale, transfer, conclusion
and modification of derivative agreements the taxable amount of the FTT shall
be the notional amount at the time the derivative agreement is purchased/sold, transferred,
concluded or modified. This approach would allow for a straightforward and easy
application of FTT on derivative agreements 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 agreement as there would be no tax incentive for example to enter
into an agreement on differences in prices or values only. Furthermore it
implies the taxation at the moment of the purchase/sale, transfer, conclusion
or modification of the contract as compared to taxing cash-flows at different
moments in time during the life cycle of the agreement. 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 Member States in order to prevent avoidance, evasion and abuse of the tax
(see also section 3.3.3). For example 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
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 Member
State of assessment.
The purchase/sale or transfer of certain
financial instruments other than derivatives, on the one hand, and purchase/sale,
transfer, conclusion or modification of derivatives agreements, on the other
hand, 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. 
3.3.3.     Chapter III (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 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. However, 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
European Union.
Many financial transactions are carried out
by electronic means. In these cases, FTT should be due immediately at the
moment of chargeability. In other cases, FTT should be due 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 can be
considered appropriate in this sense.
Member States should be obliged to take
appropriate measures for FTT to be levied accurately and timely and to prevent
evasion, avoidance and abuse. 
In this context, Member States should use
existing and forthcoming EU legislation on financial markets that includes
reporting and data maintenance obligations with respect to financial transactions.
Wherever necessary, they should equally use
the available administrative cooperation 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[10]
(applicable as of 1 January 2013), Directive 2010/24/EC of the Council of 16
March 2010 concerning mutual assistance for the recovery of claims relating to
taxes, duties and other measures[11]
(applicable as of 1 January 2012). Other instruments should also be resorted to
where relevant and applicable, for example the OECD - Council of Europe
Multilateral Convention on Mutual Administrative Assistance in Tax Matters[12].
The proposed Directive provides for
delegated powers as regards further details.
Together with the conceptual approach underlying
the FTT (broad scope, residence principle, no exemptions), the rules outlined
above allow to minimise tax evasion, avoidance and abuse. 
3.3.4.     Chapter IV (Final
provisions)
It follows from the harmonisation objective
of this proposal that Member States should not be allowed to maintain or
introduce taxes on financial transactions other than the FTT object of the
proposed Directive or VAT. Indeed, as far as VAT is concerned, the right of
option 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[13] should continue 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.
The provisions of Council Directive
2008/7/EC of 12 February 2008 concerning indirect taxes on the raising of
capital[14]
continue to be in principle fully applicable. This entails for instance that
the primary issue – as mentioned in Article 5(2) of Directive 2008/7/EC – of
shares or other securities of the same type, or of certificates representing
such securities, debentures – including government bonds – or other negotiable
securities relating to loans is not subject to FTT in the EU. In order to avoid
any potential conflict between the two Directives, it should however be
provided that the Directive proposed here has precedence over the provisions of
Directive 2008/7/EC. 
4.           BUDGETARY IMPLICATION 
Preliminary estimates indicate that, depending
on market reactions, the revenues of the tax could be 57 EUR billion on a
yearly basis in the whole EU.
The proposal would create essentially a new
revenue stream for the Member States and the EU budget – in line with the Proposal
for a Council Decision on the system of own resources of the European Union of
29 June 2011. 
The revenue arising from the FTT in the EU
can be wholly or partly used as own resource for the EU Budget replacing certain existing own resources paid out of national
budgets, which would contribute to budgetary consolidation efforts in the
Member States. The Commission will
separately present the necessary complementary proposals setting out how the
FTT could be used as a source for the EU budget.
2011/0261 (CNS)
Proposal for a
COUNCIL DIRECTIVE
on a common system of financial
transaction tax and amending Directive 2008/7/EC
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 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[15],

Having regard to the opinion of the
European Economic and Social Committee[16],

Acting in accordance with a special
legislative procedure,
Whereas:
(1)              
The recent financial crisis has led to debates
at all levels about a possible additional tax on the financial sector and in
particular a financial transactions tax (FTT). This debate stems from the
desire to ensure the financial sector contribute to covering
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)              
In order to prevent distortions through measures
taken unilaterally by Member States, bearing in mind the extremely high
mobility of most of the relevant financial transactions, and thus to ensure the
proper functioning of the internal market, it is important that the basic
features of a FTT in the Member States are harmonised at Union level.
Incentives for tax arbitrage in the Union and allocation distortions between
financial markets in the Union, as well as possibilities for double or non
taxation should thereby be avoided.
(3)              
For the internal market to function properly,
FTT should apply 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 and modification of all derivative contracts. For
the same reason, it should apply to a broadly determined range of financial
institutions.
(4)              
The definition of financial instruments in Annex
I to the 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 (MiFID)[17] covers units in collective
investment undertakings. This implies that shares and units of undertakings for
collective investment in transferable securities (UCITS) as defined in Article
1(2) of Directive 2009/65/EC of the European Parliament and of the Council of
13 July 2009 on the coordination of laws, regulations and administrative
provisions relating to undertakings for collective investment in transferable
securities (UCITS)[18]
and alternative investment funds (AIF) as defined in Article 4(1)(a) of
Directive 2011/61/EU of the European Parliament and of the Council of
8 June 2011 on Alternative Investment Fund Managers and amending
Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and
(EU) No 1095/2010[19]
are financial instruments. Therefore, the subscription and redemption of these
instruments are transactions that should be subject to the FTT.
(5)              
In order to preserve the efficient and
transparent functioning of financial markets, it is necessary to exclude
certain entities from the personal scope of this Directive, in as much as these
are exercising functions which are not considered to be trading activity in
itself but rather facilitating trade, or as they enter into financial
transactions in order to financially assist Member States. 
(6)              
Transactions with national
central banks, just as those with the European Central Bank should not be
subject to FTT so as to avoid any negative impact on the refinancing possibilities
of financial institutions or on monetary policies in general.
(7)              
With the exception of the
conclusion or modification of derivative contracts, most
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. 
(8)              
Chargeability and taxable amount should be
harmonised so as to avoid distortions in the internal market.
(9)              
The moment of chargeability should not be unduly
delayed and should coincide with the moment where the financial transaction
occurs. 
(10)          
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 agreements 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 latter should be
referred to as a fair reflection of the value of the transaction. Equally for
reasons of ease of calculation, the notional amount should be used where derivatives
agreements are purchased/sold, transferred, concluded or modified. 
(11)          
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, on the one hand, and the purchase/sale,
transfer, conclusion and modification of derivatives agreements.
(12)          
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 on own account or for the account
of other persons. 
(13)          
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.
(14)          
The minimum tax rates should be set at a level
sufficiently high for the harmonisation objective of this Directive to be
achieved. At the same time, they have to be low enough so that delocalisation
risks are minimised.
(15)          
In order for the FTT to be levied in an accurate
and timely manner, Member States should be obliged to take the necessary
measures. In order to render the prevention of evasion,
avoidance and abuse efficient, Member should be obliged to resort to existing
instruments on mutual assistance in fiscal matters, wherever necessary, and to
take advantage of reporting and data maintenance obligations incumbent upon the
financial sector according to the pertinent legislation.
(16)          
In order to allow the adoption of more detailed
rules for determining whether certain financial activities constitute a
significant part of an undertaking's activity, so that the undertaking can be
considered a financial institution for the purposes of this Directive, as well
as more detailed rules regarding protection against tax evasion, avoidance and
abuse, 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.
(17)          
In order to avoid conflicts between this
Directive and Council Directive 2008/7/EC of 12 February 2008 concerning indirect
taxes on the raising of capital[20]
that Directive should be amended accordingly.
(18)          
Since the objective of this Directive, namely to
harmonise the essential features of a FTT at Union level, cannot be
sufficiently achieved by the Member States and can therefore, by reason of
ensuring 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, scope and definitions
Article 1
Subject matter and scope
1.                      
This Directive establishes the common system of
financial transaction tax (FTT).
2.                      
This Directive shall apply to all financial
transactions, on condition that at least one party to the transaction is
established in a Member State and that a financial institution established in
the territory of a 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.
3.                      
This Directive shall not apply to the following
entities:
(a)         
the European Financial Stability Facility;
(b)         
subject to point (c) of paragraph 4, an
international financial institution established by two or more Member States,
which has the purpose to mobilise funding and provide financial assistance to
the benefit of its members that are experiencing or threatened by severe
financing problems;
(c)         
Central Counter Parties (CCPs) where exercising
the function of a CCP;
(d)         
Central Securities Depositories (CSDs) and
International Central Securities Depositories (ICSDs) where exercising the
function of a CSD or ICSD.
However, where an entity is not taxable
pursuant to the first subparagraph, 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 point
(c) of Article 5 of Commission Regulation (EC) No 1287/2006[21], except for the issue and
redemption of shares and units of undertakings for collective investments in
transferable securities (UCITS) as defined in Article 1(2) of Directive
2009/65/EC of the European Parliament and the Council[22] and alternative investment
funds (AIF) as defined in Article 4(1)(a) of Directive 2011/61/EU of the
European Parliament and the Council[23];

(b)         
transactions with the European Union, the
European Atomic Energy Community, the European Central Bank, 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 and the agreements for its implementation or the headquarters
agreements, in so far as it does not lead to distortion of competition;
(c)         
transactions with international organisations or
bodies, other than those referred to in point (b), 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;
(d)         
transactions with the central banks of Member
States.
Article 2
Definitions 
1.                      
For the purposes of this Directive, the
following definitions shall apply:
(1)                   
'Financial transaction' means any of the
following:
(a)         
the purchase and sale of a financial instrument
before netting and settlement, including repurchase and reverse repurchase and
securities lending and borrowing agreements; 
(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 or modification of derivatives
agreements;
(2)                   
'Financial instruments' means financial
instruments as defined Section C of Annex I of Directive 2004/39/EC of the
European Parliament and the Council[24],
and structured products;
(3)                   
'Derivatives agreement' means a financial
instrument as defined in points (4) to (10) of Section C of Annex I to the
Directive 2004/39/EC; 
(4)                   
'Repurchase agreement' and 'reverse repurchase
agreement' means an agreement referred to in Article 3 of Directive 2006/49/EC
of the European Parliament and the Council[25];
(5)                   
'Securities lending agreement' and 'securities
borrowing agreement' mean an agreement referred to in Article 3 of Directive
2006/49/EC;
(6)                   
'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 the Council[26]
or equivalent transactions involving the transfer of risks other than credit
risk;
(7)                   
'Financial institution' means any of the
following:
(a)         
an investment firm as defined in Article 4 of
Directive 2004/39/EC;
(b)         
a regulated market as defined in Article 4 of
Directive 2004/39/EC and any other organised trade venue or platform;
(c)         
a credit institution as defined in Article 4 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[27];
(e)         
an undertaking for collective investments in
transferable securities (UCITS) as defined in Article 1 of Directive 2009/65/EC
and a management company as defined in Article 2 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 the Council[28], 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;

(h)         
a securitisation special purpose entity as
defined in Article 4 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 carrying out one or more of
the following activities, in case these activities constitute a significant
part of its overall activity, in terms of volume or
value of financial transactions: 
(i)      activities
referred to in points 1, 2, 3, 6 of Annex I of Directive 2006/48/EC;
ii)       trading
for own account or for account 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).
(8)                   
'Central Counter Party' (CCP) means a legal
entity that interposes itself between the counterparties to a trade within one
or more financial markets, becoming the buyer to every seller and the seller to
every buyer;
(9)                   
'Netting' shall have the meaning defined in Article
2 of Directive 98/26/EC of the European Parliament and of the Council[29];
(10)               
'Notional amount' means the underlying nominal
or face amount that is used to calculate payments made on a given derivative
agreement.
2.                      
The Commission shall, in accordance with Article
13 adopt delegated acts laying down detailed rules regarding the determination
whether activities as referred to in paragraph 1(7)(j) constitute a significant
part of the undertaking's overall activity.
Article 3
Establishment
1.                      
For the purposes of this Directive, a financial
institution shall be deemed to be established in the territory of a 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 has its registered seat within that Member
State;
(c)         
its permanent address or usual residence is
located in that Member State;
(d)         
it has a branch within that Member State, in
respect of transactions carried out by that branch;
(e)         
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) or (d), or with a party
established in the territory of that Member State and which is not a financial
institution.
2.                      
Where more than one of the conditions in the
list set out in paragraph 1 is fulfilled, the first condition met from the
start of the list in descending order shall be relevant for determining the
Member State of establishment.
3.                      
Notwithstanding paragraph 1, a financial
institution shall not be considered established within the meaning of that paragraph,
in case 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
Member State.
4.                      
A person which is not a financial institution shall be deemed to be established
within a Member State if its registered seat or, in case of a natural person,
if its permanent address or usual residence is located in
that State, or it has a branch in that State, in respect of financial
transactions carried out by that branch.
Chapter II 
Chargeability, taxable amount and rates
Article 4
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 5
Taxable amount of the FTT in the case of financial transactions other than those
related to derivatives agreements
1.                      
In the case of financial transactions other than
those referred to in point 1(c) of Article 2(1) and, in respect of derivative
agreements, in points 1(a) and 1(b) 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 Article 2(1)(b).
3.                      
For the purposes of paragraph 2, the market
price shall mean the full amount that would have been paid as consideration for
the financial instrument concerned in a transaction at arm's length.
Article 6
Taxable amount in the case of financial transactions related to derivatives
agreements
In the case of financial transactions referred
to in point 1(c) of Article 2(1) and, in respect of derivative agreements, in
points 1(a) and 1(b) of Article 2(1), the taxable amount of the FTT shall be
the notional amount of the derivatives agreement 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 7
Common provisions on taxable amount
Where the value relevant, under Article 5
or Article 6, for the determination of the taxable amount is expressed, in
whole or in part, in a currency other than that of the taxing Member State, the
exchange rate applicable shall be the latest selling rate recorded, at the time
the FTT becomes chargeable, on the most representative exchange market of the
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 8
Application, structure and level of rates
1.                      
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 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 5; 
(b)         
0.01% in respect of financial transactions
referred to in Article 6.
3.                      
Member States shall apply the same rate to all financial
transactions that fall under the same category pursuant to paragraph 2 (a) and
(b).
Chapter III
Payment of FTT, related obligations and prevention of evasion, avoidance and
abuse
Article 9
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; or
(c)         
the transaction has been carried out on its
account.
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.                      
Each party to a transaction, including persons
other than financial institutions shall become jointly and severally liable for
the payment of the tax due by a financial institution on account of that
transaction, in case that financial institution has not paid the tax due by it
within the time limit set out in Article 10(4).
4.                      
Member States may provide that a person other
than the persons liable for payment of FTT referred to in paragraphs 1, 2 and 3
of this Article is to be held jointly and severally liable for the payment of
the tax.
Article 10
Provisions relating to time limits for the payment of FTT, to obligations
intended to ensure payment, to the verification of payment
1.                      
Member States shall lay down registration,
accounting, reporting obligations and other obligations intended to ensure that
FTT due to the tax authorities is effectively paid. 
2.                      
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.
3.                      
Member States shall, where financial
institutions are not subject to Article 25(2) of Directive 2004/39/EC, ensure the
keeping at the disposal of the competent authority, for at least five years, of
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;
4.                      
Member States shall ensure that any FTT due is
paid to the tax authorities 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.
5.                      
Member States shall ensure that the authorities
competent in the matter verify whether the tax has been correctly paid.
Article 11
Specific provisions relating to the prevention of evasion, avoidance and abuse
1.                      
Member States shall adopt measures to prevent
tax evasion, avoidance and abuse.
2.                      
The Commission may, in accordance with Article
13 adopt delegated acts specifying the measures to be taken pursuant to
paragraph 1 by the Member States.
3.                      
Member States shall, wherever necessary, make
use of the provisions adopted by the Union regarding administrative cooperation
in tax matters, and in particular by Council Directives 2011/16/EU and
2010/24/EU. They shall also make use of already existing reporting and data
maintenance obligations related to financial transactions.
Chapter IV
Final provisions
Article 12
Other taxes on financial transactions
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[30].
Article 13
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 Articles
2(2) and 11(2) shall be conferred for an indeterminate period of time from the
date referred to in Article 18.
3.                      
The delegation of power referred to in Articles
2(2) and 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 Articles
2(2) and 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 14
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 15
Amendment of Directive 2008/7/EC
Directive 2008/7/EC is amended as follows:
(1)     In Article 6(1) point (a) is deleted. 
(2)         
After Article 6, the following Article is
inserted:
"Article
6a
Relationship
with Directive …/…/EU
This Directive shall be without prejudice
to Council Directive …/…/EU[31]."
Article16
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 for its
modification. 
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.
Article17
Transposition 
1.           Member States shall adopt
and publish, by 31 December 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 and a
correlation table between those provisions and this Directive. 
They shall apply those provisions from 1
January 2014.
When 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. Member States shall
determine how such reference is to be made.
2.           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 18
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 19
Addressees
This
Directive is addressed to the 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 on a common system of financial transaction tax and amending Directive 2008/7/EC 

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 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 overly risky transactions 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. 

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. Moreover, the Commission has proposed to use the proceeds of the FTT as a future own resource 

1.6.                
Duration and financial impact 
 
 Proposal of unlimited duration 

1.7.                
Management method(s) envisaged 

The proposal has financial impact on the EU
by increasing administrative costs.
Centralised direct management by the Commission
Centralised indirect management with the delegation of implementation tasks to:
A person entrusted with the implementation
of specific actions pursuant to Title V of the Treaty on European Union and
identified in the relevant basic act within the meaning of Article 49 of the
Financial Regulation.
Shared management with the Member States
Decentralised management with third countries
Joint management with international organisations (to be specified).

2.                      
Management measures
2.1.                
Monitoring and reporting rules 
 
 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 Member States. 

2.2.                
Management and control system 
2.2.1.          
Risk(s) identified
 
 1. Delays in the transposition of the Directive at 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 risk 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 ([32]) || from EFTA[33] countries || from candidate countries[34] || 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[35] || 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[36] ||   ||   ||   ||   ||   ||   ||   ||   
 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[37] 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)[38] ||   ||   ||   ||   ||   
 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 [39] || - at Headquarters[40] || 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 totally issue of a common system 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 on anti-avoidance/antri-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
has no financial impact on revenue.
[1]               COM(2010) 549 final 
(http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0549:FIN:EN:PDF).
[2]               In particular, at the European Council meeting on 11
March 2011 the heads of state or government of the Euro area agreed that “the
introduction of a financial transaction tax should be explored and developed
further at the Euro area, EU and international levels.” The subsequent European
Council of 24 and 25 March 2011 reiterated its earlier conclusion that the
introduction of a global financial transaction tax should be explored and
developed further.
[3]               On 10 and 25 March 2010 and 8
March 2011 the European Parliament adopted resolutions calling the Commission
to carry out an impact assessment of a FTT exploring its advantages and
drawbacks. Further, it asked to assess the potential of
FTT options to contribute to the EU budget and to be
used as innovative financing mechanisms to provide support for adaptation to
and mitigation of climate change for developing countries, as well as for
financing development cooperation.
[4]               Most financial and insurance
services are exempted from VAT.
[5]               COM(2011) 510 final.
http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/proposal_council_own_resources_en.pdf

[6]               COM(2010)
700 final            
(http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0700:FIN:EN:PDF).
[7]               COM(2011) 510 final (http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/proposal_council_own_resources_en.pdf).
[8]               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. The subscription and redemption of these
instruments are thus considered financial transactions within the meaning of
the present proposal.
[9]               Notably Directive 2004/39/EC (cf. previous footnote).
[10]             OJ
L 64, 11.3.2011, p. 1.
[11]             OJ
L 84, 31.3.2010, p. 1.
[12]                http://www.oecdilibrary.org/docserver/download/fulltext/2311331e.pdf?expires=1309623132&id=id&accname=ocid194935&checksum=37A9732331E7939B3EE154BB7EC53C41

[13]             OJ L 347, 11.12.2006, p. 1.
[14]             OJ
L 46, 21.2.2008, p. 11.
[15]             OJ C …, …, p.. .
[16]             OJ C …, …, p. ..
[17]             OJ L 145, 30.4.2004, p. 1–44.
[18]             OJ L
302, 17.11.2009, p. 32–96.
[19]             OJ L 174, 1.7.2011, p. 1–73.
[20]             OJ L 46, 21.2.2008, p. 11.
[21]             OJ L 241, 2.9.2006, p. 1.
[22]             OJ L 302, 17.11.2009, p. 32.
[23]             OJ L 174, 1.7.2011, p. 1.
[24]             OJ L 145, 30.4.2004, p. 1.
[25]             OJ L 177, 30.6.2006, p. 201.
[26]             OJ L 177, 30.6.2006, p. 1.
[27]             OJ L 335, 17.12.2009, p. 1.
[28]             OJ L 235, 23.9.2003, p. 10.
[29]             OJ L 166, 11.6.1998, p. 45.
[30]             OJ L 347, 11.12.2006, p. 1–118.
[31]             OJ L ….., …., p. 
[32]               Diff. = Differentiated appropriations / Non-Diff. =
Non-differentiated appropriations.
[33]               EFTA: European Free Trade Association. 
[34]               Candidate countries and, where applicable, potential
candidate countries from the Western Balkans.
[35]               Year N is the year in which implementation of the
proposal/initiative starts.
[36]               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.
[37]               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.
[38]               CA= Contract Agent; INT= agency staff ("Intérimaire");
JED= "Jeune Expert en Délégation" (Young Experts in
Delegations); LA= Local Agent; SNE= Seconded National Expert.
[39]               Under the ceiling for external personnel from
operational appropriations (former "BA" lines).
[40]               Essentially for Structural Funds, European
Agricultural Fund for Rural Development (EAFRD) and European Fisheries Fund
(EFF).