Thursday 19 October 2017

Noonan rules out Irish participation in Europe-wide financial transaction tax

Peter Flanagan and Sarah Collins in Luxembourg

IRELAND will not take part in a Europe-wide financial transaction tax (FTT) as long as countries such as Britain and Luxembourg remain steadfastly against it.

A core group of EU states is set to press ahead with an FTT under a special legal procedure called enhanced co-operation.

The move comes after Ireland, the UK, Sweden and several other countries rejected a European Commission proposal for a 0.01pc-0.1pc levy on transactions including derivatives.

At a European finance ministers' meeting yesterday, Michael Noonan said the FTT in its current form was "not acceptable" as it could lead to financial jobs moving from Ireland to countries that did not have the tax.

Some 33,000 people are involved in finance in Ireland and Mr Noonan has repeatedly said he would not sign up to anything that may put those roles at risk.

"We have a stamp duty on share trading as it stands and I don't want to go beyond that at present because the British aren't prepared to go beyond that and Luxembourg isn't prepared to participate, so the risk of jobs moving from Ireland to other centres is quite high."

EU sources said yesterday that there were at least nine countries prepared to introduce a version of the tax -- the minimum number required under EU law -- though the size and scope had yet to be fleshed out.

Germany, France, Austria and Belgium are ready to go it alone with the likely support of Spain, Portugal, Slovenia, Greece and Hungary, while Polish finance minister Jacek Rostowski has not ruled out joining the group.

Treaty

The German and Austrian governments are hamstrung by opposition parties at home, who say they will scupper upcoming votes on the European Stability Mechanism treaty if an FTT is not introduced in Europe.

"If I don't get this co-operation, if I don't get the fellowship of more than nine colleagues here, then the ESM would not be ratified in the Austrian parliament," Austrian finance minister Maria Fekter warned yesterday.

German finance minister Wolfgang Schaeuble said there were 10 countries who could take part, while European Commissioner for tax Algirdas Semeta said there were 11 candidates.

It will not happen for sometime though, as the final terms of a tax will have to be approved by the European Commission.

Enhanced co-operation has only been used twice before -- for divorce laws and a European patent law -- and Mr Noonan made clear that he did not see the move as a precedent for a consolidated corporate tax rate.

Irish Independent

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