EU States Set Target Launch Date for Financial Transaction Tax

European states involved in the development of a Financial Transaction Tax ("FTT") agreed to make January 1, 2016 its target launch date.

The FTT is designed to oblige banks to aid in rebuilding Europe's post-crisis finances. In its initial proposal, the European Commission tried to introduce a tax of 0.1 percent for trading in shares and on bonds, and a 0.01 percent tax on derivatives such as options, futures, and contracts for difference or interest rate swaps when at least one of the parties was based in the EU.

In December 2014, the member states were unable to reach an agreement. However, in late January 2015, France and Austria unblocked negotiations by offering a compromise proposal. Under the compromise, the finance ministers of the member states said, the FTT should have the widest possible base, which would be covered by low rates, while taking into account the economic impact of the potential relocation of financial services.

Austria, Belgium, Estonia, France, Germany, Italy, Portugal, Slovakia, Slovenia and Spain all signed the common text. Of the European States involved in the FTT's development, the Greek Finance Minister alone refrained from signing.

See: Euractiv Press Release.