188 JURIDICA INTERNATIONAL XX/2013
Compliance Ofﬁ cer
Does Commission Proposed
Financial Transaction Tax
Comply With European Union
1. The proposal
On 14 February 2013, the European Commission adopted the proposal*1 for a Council Directive implement-
ing enhanced co-operation in the area of ﬁ nancial transaction tax. It’s not clear how the tax on ﬁ nancial
transactions will be implemented as many stakeholders have acknowledged its detrimental impact. Thus, it
remains to be seen by whom and how exactly it will be done. However, since 11 Member States have joined
the cooperation and consequently indicated interest in proceeding with discussions on issues of application
of the tax, it is most appropriate to analyse whether there are legal consequences to this initiative. After all
there are less than half Member States participating in it. And there is widespread negative feedback from
Most certainly this is largely a political matter that clearly has economic impact*2 as well. Whether
planned or otherwise remains to be seen. However, the legal issues associated with the Proposal are fasci-
nating as well. Intriguingly enough, the Proposal is based on enhanced co-operation of a sort that has been
applied only a few times. Also its aim is to harmonise legislation pertaining to indirect taxation in order to
ensure proper functioning of the market, while only part of the internal market supports it. This most cer-
tainly raises the question of whether the aims of the Proposal, including avoiding distortion of competition
while at the same time creating a level playing ﬁ eld with other sectors from a taxation point of view, can
indeed be reached. These legal concerns cannot be ignored.
1 See the European Commission proposal for a Council Directive implementing enhanced co-operation in the area of ﬁ nan-
cial transaction tax (COM/2013/71) (hereinafter ‘Proposal’). Available at http://ec.europa.eu/taxation_customs/resources/
documents/taxation/com_2013_71_en.pdf (most recently accessed on 14.4.2013).
2 Impact assessment accompanying the document ‘Proposal for a Council Directive Implementing Enhanced Cooperation in the
Area of Financial Transaction Tax’: Analysis of policy options and impacts’ (SWD/2013/28). Available at http://ec.europa.
eu/taxation_customs/resources/documents/taxation/swd_2013_28_en.pdf (most recently accessed on 14.4.2013).