I propose to take Questions Nos. 149 and 150 together.
Both questions appear to refer to the model of Financial Transactions Tax (FTT) proposed by the European Commission, initially in 2011 and then revised under the EU’s enhanced cooperation procedure in February 2013. The proposed rate on exchanges of shares was 0.1% and the proposed rate for derivative transactions was 0.01%.
Since it was first mooted, Ireland has had concerns in relation to the FTT proposals, which are widely shared amongst other Member States, including some of the countries participating in enhanced cooperation. In line with those concerns, I continue to believe that the tax only makes sense if it covers many countries or else transactions will shift toward those financial centres which are not covered by it.
If however Ireland were to participate in an EU wide FTT, this would necessitate the abolition of our current tax, a stamp duty, on financial transactions. I am advised by Revenue that the yield from the Irish stamp duty of 1% on transactions in shares, stocks and marketable securities was €420.7m in 2018 and €425.3m in 2017. Instruments used in the financial services industry such as derivatives are generally exempt from stamp duty, unless they relate to immovable property in Ireland or shares in Irish registered companies.
The FTT proposal is still being discussed by Eurogroup Finance Ministers and by the ten Member States involved in the enhanced cooperation process, which formed following the failure of the 2011 proposals to gain sufficient support. As I have already noted, Ireland, which is not one of the ten, has not changed its position.
Notwithstanding this, we are not inclined to stand in the way of any other EU Member States that may wish to work together to implement a Financial Transactions Tax.
It is not possible to accurately estimate from data held by Revenue or my Department the yield of an FTT modelled on the proposed EU one, i.e. a tax of 0.1% on share and bond transactions and 0.01% on derivative products.
Finally, I am informed by my Department that the FTT has not been formally tabled in the discussions on the EU Budget’s Own Resources to date.