The Slovenia Times

Govt Wants to Set Financial Services Tax at 6.5%


According to the government, the tax is to level the tax burden on the finance industry compared to other sectors, since financial services are not liable for VAT, while other sectors of the economy bear a number of different taxes.

Moreover, the government believes a tax on financial services would bring a net EUR 50m in additional budget revenue, a much needed boost for public finances as the government strives to narrow the budget gap.

The tax is to be paid monthly on commission on loans, loan brokering and management, loan guarantees, deposits, payments and other transactions, including dealings with cash, in trading with securities and management of investment funds.

On the other hand, the institutions exempt from the tax would include central bank Banka Slovenije, the EU, European Central Bank (ECB), European Investment Bank (EIB), European instruments for financial stability, international organisations and diplomatic representations, while the tax would also not be paid for services already liable for VAT.

Although the tax is to be paid by financial institutions when charging a commission, concern has been voiced that the burden would be shifted to the users of financial services.

After the government unveiled the plan for the financial services tax on Thursday, the European Commission said on Friday it had received a formal expression of interest from Slovenia for joining the core group of EU countries that want to introduce a financial transactions tax of 0.1% on trades in shares and bonds, and a 0.01% tax on trading in derivatives.

Aside from Germany and France (the initiators), Belgium, Portugal and Austria have so far officially requested to join the plan, which would be carried out as part of the so-called enhanced cooperation, but in order to proceed at least nine countries have to come on board.

The transactions tax will also be on the agenda of a meeting of EU finance ministers on Tuesday. Greece and Estonia are reportedly interested in joining the scheme as well.


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