EU would accept watered-down transaction tax - paper

BERLIN (Reuters) – The European Union’s Taxation Commissioner has said he is prepared to accept a more limited tax on financial transactions, following concerns from some countries that the scope of the original proposal was too wide.

“We would support a compromise with a more limited remit… the only red line for us is that any loopholes which would jeopardise the main principle of the tax be avoided,” Algirdas Semeta told German financial newspaper Boersen Zeitung.

Eleven of the 28 EU countries have pledged to tax trades in stocks, bonds, derivatives and other financial transactions, to make banks pay for some of the taxpayer money they received during the 2007/09 financial crisis.

But they would consider narrowing the levy’s scope to shield pensions, government debt and markets that help to grease the economy, an EU document seen by Reuters earlier this month showed.

Britain, the EU’s biggest trading centre, is challenging the tax in the EU’s highest court.

Member states were examining an “ambitious proposal” by the Commission and discussing exemptions, Semeta said.

“At the moment negotiations are centring on key themes such as government bonds and repo trades as well as how to treat primary dealers – market makers and pension funds,” he said.

A compromise could be agreed by next May, he added, although it would then take time to make law.

France is already pushing for a more modest stamp duty-type tax on share trading, which it has introduced nationally, while Italy is worried about the impact on its sovereign debt.

(Reporting by Alexandra Hudson; Editing by Erica Billingham)

EU would accept watered-down transaction tax - paper