EU Financial Transaction Tax Deadline Said to Be Pushed Back

The 10 European Union countries pushing for a new tax on financial transactions have pushed back a September deadline for a verdict on the plan, according to a European official with knowledge of the talks.

Austrian Finance Minister Hans Joerg Schelling, who’s leading the discussions, presented a compromise proposal in June, and said a “final decision” would have to be made in September when task forces report back on two “technical issues” that remain to be resolved.

Those groups weren’t able to wrap up their work over the summer, however, so the next round of discussions is now planned for an Oct. 10 meeting of euro-area finance ministers, the official said, declining to be identified because the negotiations are private. The delay doesn’t indicate that fresh disagreements on the plan have emerged, the official said.

Plans for a transaction tax already failed among all 28 EU nations, and the current talks are seeking a compromise among a smaller group that sought to press on under “enhanced cooperation” rules, which require consensus from at least nine nations. The countries still involved are Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.

Under the June proposal, “harmonized taxation” would be applied to stocks issued in one of the 10 participating countries. “All shares” would be taxed after a transition period “unless participating member states decide otherwise.” 

The tax would cover “all derivatives,” though initially products “with public debt to 100 percent as direct underlying” would be exempt. Repurchase agreements, which are used for short-term financing, as well as transactions of public debt managers would also be excluded.

German Finance Minister Wolfgang Schaeuble said last month that he would prefer to tax financial transactions on a global level and that Europe was “hitting a wall” in trying to reach a solution.