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THE EUROPEAN COMMISSION has sharply rejected suggestions that a controversial Financial Transactions Tax, championed as a way of making the banks pay for their past excesses, contravenes EU law.
The commission “carried out a very thorough legal analysis” before submitting its FTT proposals,” EU Tax Commissioner Algirdas Semeta said in a tweet.
“The FTT is legally sound and is fully in line with EU treaties” and international tax legislation, Semeta said.
Press reports said an opinion drawn up by lawyers for the European Council — the EU’s political arm comprising member countries — had found that the FTT would discriminate and disadvantage those who do not adopt it.
€30-35 billion
The commission believes the FTT, championed by France and Germany, would raise €30-35 billion annually via a levy on trade in shares, bonds and derivatives.
The tax would apply to any transaction, anywhere in the world, carried out by a financial entity which is based in one of the 11 EU member states which have so far agreed to implement it.
But the council’s lawyers said that this was a step too far, exceeding the tax jurisdiction of those EU states.
It “is not compatible” with the current EU treaty “as it infringes on the tax competences” of non-participating states, the opinion said.
‘Likely to lead to distortion of competition’
In addition, the FTT “is discriminatory and likely to lead to distortion of competition to the detriment” to those who do not sign up, it added.
For example, such discrimination could punish Britain, a financial powerhouse which bitterly opposes the FTT and refuses to join.
As the FTT currently stands, in a trade between a French and British bank, France would tax both entities.
Meanwhile in a trade with Germany, which backs the plan, France would tax only its bank and Berlin the German counterparty, meaning that France would earn twice the tax on a trade with a non-FTT country such as the UK.
Emer Traynor, Semeta’s spokeswoman, said the Commission “strongly disagrees” with the Council’s legal opinion, charging that it looked at only one part of the FTT and “not the tax as a whole.”
“In any case, this opinion is one of many which have been fed into the discussions … it certainly doesn’t imply any necessary slowdown” in work on the proposal, she said.
The commission legal service will, however, analyse the opinion “in further detail”, she added.
France and Germany have led efforts to introduce the FTT, winning backing from Austria, Belgium, Estonia, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.
The UK , where London is home to one of the world’s largest financial centres, sees the FTT as infringing on its right to tax, a sovereign power not to be shared with Brussels.
The 11 member states in favour were authorised to go ahead with the planned levy under what is known as “enhanced cooperation”, a rare procedure enabling a minimum third of EU nations to work together without the rest when there is no general agreement.
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The majority of the country know this. These policies are for the benefit of the privileged few that FFG govern for.
A mandate is needed for these policies being pursued. Supply and Confidence is no mandate, by a skewing of democracy to benefit the few.
@Dave Doyle: The majority of people have already saved and borrowed and provided housing for themselves and their families and efforts to “benefit the few” who have not yet done this are just what’s needed.
@Tom Molloy: This has been explained before. The majority of homeowners bought when it was easier to do so. Rents were a smaller proportion of a salary (due to rent caps actually) and house prices were lower compared to salaries.
@SC: “The majority of homeowners bought when it was easier to do so”
Being indepted to something for 25+ years is anything but easy. Everything is relative to the cost of living.
I know, let’s set up another quango, give it an annual budget do it can attend dinners and conferences. Staff it with the buddies/wives/children of ministers, model it on the quango that was set up two years ago but only help 6 people buy a house, bring in some Yes man government consultant who can produce stats and figures as to why this one is guaranteed to work.
Bingo, welcome to the thought process of almost every minister in dealing with a crisis
FFG are destroying a nation.. They’ll kiss and make up to ensure another 2 years at the trough whilst homeless grows….
We need election which FFG are preventing..
@Willy Mc Caul: God forbid a death of a homeless person with the onset of winter.. The discontent at FFG now is bad. A spark as said could lead to a violence. They can stay at trough, but can’t keep ignoring the people. Demonstrations are growing and inevitably will get bigger with the inaction of these elitist..
@Willy Mc Caul: well the FFG party won’t care if people die. The next time it happens there needs to be proper trouble.
@Willy Mc Caul: do you honestly believe our government goes into power with the intention of “destroying a national” just read and reflect on your comment!
The market has come back again after a recession and like any market prices are down to supply & demand, homelessness is a huge issue usually it’s a result of drugs, alcohol, mental health etc
The government has a 1 billion euro tender out to build affordable homes this issue won’t be resolved until there is more supply .
Massive social unrest is absolutely essential.
@mursim: bit excessive…
@Attilio: No its not ,it should have happened before now.
The tax relief allowed to landlords is on the interest on the debt which is undeniably an ordinary business expense. For a landlord who bought in 2006-2007, rents and property prices both fell off a cliff and have only recently returned to their original level. A Dublin apartment property bought for 325K in 2006 is now worth 290K. Where is the massive increase in property values there? The simple reality is that many landlords were selling up because it was unaffordable for them to stay in business. Several independent studies commissioned by the Government attested to this. This loss of rental supply was driving up rent prices.
The budget is only insane if you think that FG are actually interested in housing poor and low income families. They aren’t and they’re quite happy to let them go homeless. This was a budget for the landlords and bosses because that’s who FG represent. That’s who they are.
Victor Duggan is a socialist who spins for Labour his opinion, and that’s what this article is, biased spin and not in any way an economic evaluation.
That been said it is hard to believe an ‘economist’ can say unequivocally that interest payments should not be deductible as an expense is incredulous. In simple terms it is merely a taxation of one person to the benefit of another. This article offers no thought for the vast majority of landlords, some 70%, who are NOT professional landlords, and in many cases are subsidising, through their earned income, the tax take on their ‘investment’.
52% of profit on rental income will be taken by the government and rightly so if its profitable additional earned income. Meanwhile vulture funds were allowed enter the market as charities and pay 1 or 2% effective tax if any and the so called ‘professional’ landlord will be a corporation and at best pays 12.5%.
The vast majority of the accidental landlords are your friends and neighbours who were forced into letting there properties by bailed out banks to simply stave off repossession. This measure simply allows them offset some of the cost of providing a property for rent. There are horror stories on both sides on the one hand greedy price gouging landlords on the other renters’ entrenched for two or more years without paying a penny all the while protected by a bureaucratic nightmare that is the RTB and poorly styled legislation intended to offer security of tenure.
There are always two sides with rights and wrongs on both but this measure is designed to merely increase supply and quality of the rental stock it enriches nobody it merely realigns the distribution. It is also worth noting the deduction of interest against rents received will in all probability increase the amount of rent taxable at 52% so will end up back in the state coffers to subsidise the huge expenditure on social housing, itself a redistribution of your tax take from you to another.
In economics there is a principle called the opportunity cost (google) in short every penny that goes into providing social housing leaves an equal penny short in health, disability, national debt etc. Society will decide whether this is fair and just but society also needs to understand everyone is entitled to be heard.
@Emmet Doyle:
A nice balanced assessment – well done!
I disagree with the premise that the housing stock will be greatly reduced by acquisition for the purposes of social housing, given the number of houses (~20,000) being built by private contractors. I know folks on here think the word “private” is sinful, but this element of housing supply is also crucial.
Any truth to what Karl Dieter was saying last night about the number of houses which aren’t fully occupied? His numbers suggested that there are 10k beds, in social housing, not being used.
@MK76: saw that as well. 1 person living in a 5 bed council house in dlr. They should be moved to a smaller house and a family moved in but sure you can going using common sense like that
@talkingsense: *cant
Ireland unhoused shall never be at peace.
Tory goverment thats what FG are and FF are not much better..
Good article,
Why has every one forgotten about NAMA? The national building contractor?
Why are they not part of the discussion any more considering they are active property speculators and building contractors??
Dont forget the councils who are also actively involved in thw sale of land for profit, Land that belongs to the state , IE….
You and I.
This is as big a scandal as the promissory note. Its criminal.
The heading of this article should be,addressed to the liberal party’s in Ireland.
These are populist measures aimed at Fine Gaels 28%. Short term measures to please that cohort coming into an election. Long term these measures will make rents rise and the country completely uncompetitive as wages rise to supplement that.
The title of this article perfectly sums up the voting patterns of those who habitually vote FFG
The writer’s deep dive hasn’t quite reached the roots of Ire H crisis.
The no. one issue is obviously dev land availability, where D far > S in or near all centres of growing pop.
Gov appears content to have S fed in like poison; a little at a time!
NAMA, with its massive land banks, seem in no mad rush to go to mkt, presumably not wishing to flog off too much family silver given legacy debt to be recovered from pre crash era.
CGT at 33% doesn’t cut the mustard for the land owner in cashing in those chips. So why sell now if land values are only going one way?
Credit to Gov for attempting to incentivize residential landlords back into mkt/or even stay, with those measures. A no brainer with H supply being the problem.
Something innovative is required to speed up Land availability.
I have hardly read the article with so KBC advertising plastered about . Budget 2019 supported by KBC – LOL
That’s also the definition of practice.
The left parties including the shinners should write to all the vulture funds and the corporate investors and the Banks that prey on the needy like the homeless that they will reverse all the bad laws that are made in the moment for their benefit. Let’s see how many continue with their wanton greed. Roll on the elections and the revolution. Fight on comrades.
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