• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/3/2013

EU - Financial transaction tax approved by EU Parliament 

July 3:  The EU Parliament today approved a proposed financial transaction tax to allow 11 EU Member States to impose tax on trades in stocks and bonds (at a rate of 0.1%) and on derivatives (at a rate of 0.01%).

Under the proposal, lower rates would apply until 2017 for trades in sovereign bonds (taxed at rates of 0.05% for stocks and bonds, and at 0.005% for derivatives) and pension fund industry trades.

Also, a provision would add a new legal ownership principle, to address tax avoidance. For example, if the buyer of a security did not pay the financial transaction tax, there would be no legal certainty of ownership of that security, and the trade could not be cleared centrally.

Participating countries would be allowed to apply a higher rate to riskier "over the counter" trades.

Next steps for FTT

Given the European Parliament has a consultative role, it is now up to the 11 EU Member States—Austria, Belgium, Estonia, France, Germany, Italy, Greece, Portugal, Slovakia, Slovenia, and Spain—participating in the enhanced cooperation arrangement to implement the measures.

Read a related EC release (3 July 2013).

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