financial transaction tax

UK House of Lords EU Committee Report on European Commission’s Financial Transaction Tax Proposals

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On December 10, the UK House of Lords EU Sub-Committee on Economic and Financial Affairs published a follow-up report to its March 2012 report on the European Commission’s proposals for a financial transaction tax (FTT).

The Committee’s report identifies “serious” flaws with the Commission’s use of enhanced cooperation, including the adverse impact on institutions in non-participating member states, such as the UK.  Report.

European Parliament Adopts Legislative Resolution on Financial Transaction Tax

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On 23 May 2012, the European Parliament approved an amended version of the European Commission’s proposal of 23 September 2011 for a Council Directive on a common system of financial transaction tax (FTT). The Resolution states that such a FTT should go ahead even if only some member states would opt for it.

The Resolution:

  • Retains the Commission proposal timetable: 31 December 2013 deadline for member states to adopt implementing laws and 31 December 2014 for entry into force of these laws.
  • Retains the original Commission proposal to exempt transactions made on the primary market, purchasing of securities from the issuer when such securities are first placed on the market.
  • Inserts an “issuance principle” to the Commission’s proposal, whereby financial institutions located outside the EU would also be obliged to pay the FTT if they traded securities originally issued within the EU.
  • Exempts pension funds from the FTT.

The resolution can be found here.