• 15/04/2024 09:17

The EU agreed on a tax on frozen assets of Russia – Bloomberg

The European Union intends to introduce a tax on profits from frozen assets of the Russian central bank. At the same time, the EU does not yet intend to confiscate this money. Bloomberg reports this with a link to its sources.

The EU has agreed on a tax on frozen assets of Russia — Bloomberg

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It is noted that EU foreign ministers have given their political blessing for the introduction of the tax on January 22. The issue will be discussed by the bloc's ambassadors later this week.

Ukraine's allies generally agree that Russia must pay for the damage caused by its war. The EU, G7 countries and Australia have frozen about 260 billion euros in Russian central bank assets in the form of securities and cash, with more than two-thirds of this amount held in the EU. The majority of EU assets are held at the Euroclear clearing house, where they generated €3 billion in revenue last year.

EU High Representative Josep Borrell said EU foreign ministers had considered options for using revenues from withholding frozen Russian assets, and the European Union is approaching a common political solution on this issue.

Some countries are against the confiscation of Russian assets

A group of countries, notably Germany, have made it clear that they oppose the confiscation of Russian assets on legal grounds.

Last year, the EU's foreign affairs office proposed a multi-step process that would first identify relevant assets and determine actions that central securities depositories that hold these funds will need to take before the next steps are proposed.

These steps will determine how the windfall tax applies to profits derived from frozen assets and income that transferred to the EU budget for use in Ukraine. Expenses and national taxes will be allocated to the transfer of income.

The United States recently signaled that it may be prepared for complete asset confiscation. But even the smaller move to tax profits has moved slowly in the EU as several member states and the European Central Bank are concerned about the potential impact it could have on the stability of the euro.

minfin.com.ua

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