The Taxation workstream was tasked with steering the IRSG's response to EU taxation policy proposals and identifying opportunities to engage on policy development in Brussels and Member States. The workstream focused on proposals which do not impact one financial sector alone (i.e. not solely impactful on banks, asset managers or insurers etc.) and have, or could potentially have, a material impact on London as Europe’s leading financial centre.
i. Financial Transaction Tax
In September 2011, the European Commission set out proposals for the implementation of a pan-European Financial Transaction Tax, covering a wide range of financial transactions. This initial proposal by the Commission was ultimately unsuccessful however, in January 2013, an Enhanced Cooperation Procedure (ECP) was set in motion by eleven Member States (EU-11) willing to implement a common FTT. This group comprised Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. In December 2015, Estonia withdrew from the ECP leaving behind ten participating Member States (EU-10) to reach an agreement on the tax.
The IRSG is opposed to the introduction of an EU Financial Transaction Tax on the grounds that it will harm the competitiveness of the EU and will negatively impact the wider economy. To support its work in this area, the IRSG produced the following research and reports:
The impact of the financial transaction tax on European household savings
Implications of a financial transaction tax on the European regulatory agenda
The impact of the financial transaction tax on corporate and sovereign debt
Financial Transaction Tax: high-level summary of tax options
ii. Corporate taxation
In March 2015, the European Commission presented its Tax Transparency Package containing a number of measures to boost the transparency of corporate taxation in the EU. This was complemented by the publication of an Action Plan on Corporate Taxation in June 2015, an Anti-Tax Avoidance Package in January 2016 and a Corporate Tax Reform Package in October 2016. The Commission’s corporate taxation agenda is central to its political priority to ensure a fairer Single Market, and aims to ensure fair taxation where profits are generated; create a better business environment; increase transparency and improve EU coordination.
The IRSG welcomes the Commission’s consideration of issues relating to corporate tax avoidance and evasion and, with the objective of supporting the development of any EU-wide proposals, published a letter for the attention of Commission officials in December 2015.
Composition of the workstream:
The workstream was chaired by Martin Walker (Deloitte) and was comprised of banks, asset managers, professional services and trade associations with representative from the following organisations:
- Allianz Global Investors
- City of London Corporation
- Deloitte (chair)
- Finance and Leasing Association
- Investment Association
- JP Morgan