The Netherlands has said it will adopt the proposed EU Robin Hood tax — the financial transaction tax — provided it is not imposed on pension funds.
This is a blow to countries that are firmly against the EU adopting such a tax, including Ireland and Britain. Eleven countries have already agreed to it.
The Dutch had been firmly against adopting the tax but the Labour party in the new coalition said it should be part of their programme for government, agreed this week.
As well as making it a condition that pension funds would be excluded from the tax, the Netherlands say the revenues must return to the member state. The European Commission suggested two thirds of the proceeds go to offset member states contributions to the EU.
The European Parliament has voted that the tax would not apply to pensions. The Dutch central bank said the proposed tax would yield about €4bn, with €1.7bn of this borne by pensions.
Ireland and Britain apply a stamp duty that is paid by the final purchaser or seller. In Britain, banks, investment firms, and investment banks do not pay it and, as a result, about 70% of the total UK stock market volume is exempt, according to a report by Oxera. All currency and derivative transactions are also exempt.
Ireland has said it would fear losing business to London if it introduced the tax, which proposes a levy of 0.1% on shares and bonds and 0.01% on derivatives.
The commission estimated the tax could bring in over €750m a year in Ireland, and Labour MEP Nessa Childers disputes the Government’s argument that it would lead to a flight of companies from the Financial Services Centre.
The original proposal included the principles of residence, issuance, and ownership, and is set to be included in the draft being prepared for the 11 countries that want to adopt it.
This means that if any of the transactions involve the parties or trades being resident, owned, or issued by individuals or companies in the participating countries, then they must pay the tax.
Ms Childers said: “This would make the risk of relocation of activity from the IFSC very low, as firms would have to stop comp-letely serving the European market to avoid the tax.
“The Irish financial sector provides thousands of good jobs and much-needed tax revenue. It is absolutely correct that we work for a strong and sustainable Irish financial sector.
“However, there is no independent evidence to back up claims of possible negative effects of the proposed tiny tax in Ireland.”
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