Proposed by the European Commission in 2011, to make sure the industry made a “ fair contribution” after taxpayers bore the costs of the financial crisis, the Financial Transaction Tax ( FTT) is under discussion regarding its effects on pension funds.
On the 21st of February, a meeting involving the Finances Ministers of those countries was held and focused on a possible exemption for pension funds. The discussion was whether a pension fund exemption would apply in general or if a Member States should be able to work with an individual “opt-out clause”. The Belgian Occupational Pensions Association has warned about the damaging effects of the FTT.
It was raised that a general opt out for pension funds from the tax would have to be extended to insurance companies since these funds aren’t public entities in some of the participating countries. But some warned that exempting insurance from the levy would mean that the revenue raised is too small to justify it, and that would give the insurance sector undue advantage over the rest of the financial industry.
Because the Financial Transaction Tax was not really well received by the 28 MS, 10 Member States (Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain) have launched an “enhanced cooperation”.
A technical analysis of the effects of a FTT on the real economy and the pension funds will be carried out by the end of March.