Taxation of the Financial Sector

Key points

Appropriate regulation and supervision should ensure the stability and effectiveness of the financial sector as well as the creation of appropriate incentives for financial sector institutions.

The financial sector should contribute to the fiscal consolidation efforts in a fair and substantial way.

Initiatives in this way should take into account the divergent impacts they may have on each individual Member State.

Any new tax on financial institutions should be designed in a way that takes into account the institutions’ ability to pay and their ability to comply with new capital requirements. It is also vital to take into consideration all aspects of competitive implications of new taxes on the banking industry.

As regards the administrative burden in relation to the new tax, the Commission should pay particular attention to the proportionality principle.

The introduction of a FTT at global level should be preferred over an EU-wide FTT. However, if it emerges that the adoption of a FTT at global level is not feasible, then the EESC would envisage the adoption of an EU FTT taking into account the outcome of the impact assessment.

The EESC believes that if a new financial sector tax were based on cash flows or based on similar factors, then the Commission should assess the merits of designing it within the VAT framework.