The Court of Justice of the European Union has dismissed the UK's action against the European Council's decision to authorise eleven Member States to use the enhanced cooperation procedure to set up a financial transaction tax (‘FTT’). The UK brought the case on the grounds that the decision to authorise the adoption of a FTT produces extraterritorial effects. It further maintains that, read together with other directives on mutual assistance and administrative cooperation in the area of tax, the FTT will impose costs on non-participating Member States.

In making its decision, the Court reviewed the issue of whether the granting of authorisation to allow FTT under enhanced cooperation is valid and found that the contested decision does no more than authorise the establishment of enhanced cooperation, but does not contain any substantive element on the FTT itself.

The Court stated that its current decision does not preclude a further review of FTT which may be undertaken once the implementing measure to be adopted by the participating States is in place.

The full judgement is available on the Curia website.