Thursday, February 6, 2020
Austrian Chancellor Sebastian Kurz has said that Austria does not agree with new German proposals for a European financial transactions tax (FTT).
Under proposals presented by German Finance Minister Olaf Scholz to the 10 European Union member states attempting to come to an agreement on the terms of an EU FTT, a tax of 0.2 percent would be imposed on the purchase of shares in domestically listed companies with a market capitalization in excess of EUR1bn (USD1.2bn). The tax would also apply to depositary receipts issued domestically and abroad and which are backed by shares in these companies. Initial share offerings would be excluded from the FTT.
The German Government says such a tax would apply mostly to institutional investors. However, the Austrian Government is concerned that the measures would also adversely affect individual investors.
"We don't want only small investors to be affected, because in Austria too few people are involved in the capital market anyway," Kurz said during his visit to Berlin on February 4, 2020.
Kurz added that Austria's preference is that the tax be borne by "speculators who were responsible for the last financial crisis."
"The current proposal by finance minister Scholz is one that we reject," he was quoted as saying at a joint press conference with German Chancellor Angela Merkel.
Last month, Scholz issued a statement expressing his confidence that an agreement on the EU FTT would be reached soon. However, Kurz's comments suggest that Austria at least is not on board.
Besides Austria and Germany, the other member states taking part in the EU FTT negotiations include Belgium, France, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain. These countries are participating in the initiative under the EU's enhanced cooperation mechanism, which allows smaller groups of member states to proceed with EU legislation when unanimity on a proposal cannot be achieved.
As initially proposed by the European Commission in 2011, the FTT was to be imposed on all transactions in financial instruments, with the exchange of shares and bonds taxed at a rate of 0.1 percent and derivative contracts at a rate of 0.01 percent. However, member states failed to reach an agreement on the technical details of the draft directive.