The European Commission has published its latest proposals for FTT following the EU Finance Ministers’ agreement in January to allow the 11 Member States to progress with the FTT under enhanced cooperation. These latest proposals are in line with the original proposals published by the Commission in September 2011 but are amended to include additional anti-avoidance and anti-abuse provisions and to clarify when the FTT will or will not be applied. According to the Commission, the FTT is expected to raise revenues of €30 to €35 billion a year.

The main changes in the latest proposal are:

• An issuance principle has been added as an anti-avoidance measure. This means that financial instruments issued in the participating 11 Member States will be taxed when traded, even if those trading them are not established within the FTT-zone.
• A general and a specific anti-abuse clause have also been added to the proposal;
• Member States and other public bodies, when managing public debt, are now explicitly excluded from the scope of the Directive imposing FTT;
• The European Central Bank, European Financial Stability Facility and European Stability Mechanism are now explicitly referred to as being exempt from FTT;
• Exchanges of financial instruments will now be considered as two transactions for tax purposes, while repurchase and reverse repurchase agreements and securities lending and borrowing will be regarded as only one transaction, as according to the Commission, they are economically equivalent to a (single) credit operation;
• The issuance of shares and units in collective investment funds and restructuring operations are now also excluded from the scope.

These proposals must be discussed by Member States, with all 27 Member States entitled to participate in those discussions. However, only the Member States participating in enhanced cooperation will have a vote, and they must agree unanimously before it can be implemented. The European Parliament will also be consulted.