Open AccessFinancial Transactions Tax as an Integration Development Instrument in the EU
Author(s) -
Ilya Lifshits
Publication year - 2020
Publication title -
sovremennaâ evropa
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.223
H-Index - 5
ISSN - 0201-7083
DOI - 10.15211/soveurope52020165172
Subject(s) - business , finance , tax harmonization , financial instrument , direct tax , tax reform , double taxation , european union , indirect tax , tax avoidance , value added tax , financial transaction , database transaction , accounting , ad valorem tax , economics , economic policy , public economics , tax competition , computer science , programming language
The adoption of a legal instrument relating to the harmonization of the ten Member States‟ laws on the financial transaction tax could be the first attempt in the EU history to establish an enhanced cooperation in the area of taxation. This project should be considered in the wider context of the financial sphere reform, which was caused by the global financial crisis. The draft Directive implementing enhanced cooperation in the area of the financial transaction tax has been discussed in the Council for 7 years but an accord has not been reached yet. The ambition of the European Commission to enlarge the scope of the financial transaction tax payers as much as possible is perceived by the non-participating Member States as an encroachment of their tax jurisdiction which contradicts the international customary law as well as The Treaty on the Functioning of the European Union. An examination of the reasons of unsuccessful negotiations may lead to a conclusion on drawbacks of the enhanced cooperation in taxation policy. It is not likely that this mechanism would be used in the future to tax a very mobile financial market where the tax base may be easily transferred to the non-tax states. Meanwhile the participation of the leading EU States in the project, a wide public support of the „Robin Hood Tax‟ and Brexit suggest that in the coming months financial transactions in ten Member States will be charged by the harmonized tax. However, the scope of the tax would be reduced in comparison with that in the initial draft of the European Commission.