Law Society urges UK government to continue fight against financial transaction tax
The EU Court of Justice has today dismissed the UK government's legal challenge to the use of enhanced co-operation to create a Financial Transaction Tax (FTT).
Gary Richards, chair of the Law Society's Tax Law Committee, said:
'What's important to understand is that this is only a ruling on the procedure used for the Financial Transaction Tax. The ruling does not address the substance of the FTT legislation itself, which is actually still being negotiated as the 11 participating member states have yet to reach agreement on some of the most basic aspects of the tax.'
The Law Society has, on several occasions, raised concerns about the extraterritorial effects of the FTT as proposed by the European Commission and the need to amend those sections of the draft law to ensure that a potential FTT respects the EU treaties and the decision by a majority of countries not to participate in the proposed tax.
Gary Richards continued:
'It remains to be seen what kind of FTT the participating countries will be able to agree on. We will continue to urge the countries to take into account the problems with extraterritoriality in the original proposal. The Treaties are clear that any substantive law arising out of enhanced co-operation must respect the rights of those countries that have decided not to participate. If the final FTT proposal forces a degree of involuntary participation on those countries, a legal challenge to that piece of legislation would remain on the table as an option irrespective of today's ruling.'
Notes:
Enhanced co-operation procedure is a procedure that allows a group of at least nine member states to enact legislation in an area where it has not been possible to obtain the necessary majority or unanimity (depending on the treaty base of the legislation in question).
