EU Parliament supported Financial Transaction Tax

www.europarl.europa.eu

As the European Parliament has a consultative role on tax matters it is now up to the 11 member states participating in the enhanced cooperation arrangement to reach a deal

03 July 2013 European Parliament voted in favor for a comprehensive financial transaction tax in 11 EU countries with a wide scope and rates of 0.1% for trades in stocks and bonds and 0.01% for those in derivatives.

Lower rates should apply until 1 January 2017 for trades in sovereign bonds and pension fund industry trades. Trades in sovereign bonds should be only taxed at 0.05% until 1 January 2017 and, up until the same day, trades of pension funds would be taxed at 0.05% for stocks and bonds and 0.005% for derivatives.

The adopted text also introduces provisions to make evading the FTT potentially far more expensive than paying it. The text links payment of the FTT to the acquisition of legal ownership rights. This means that if the buyer of a security did not pay the FTT, there would be no legal certainty of owning that security and the trade could not be cleared centrally.

The 11 participating member states are: Austria, Belgium, Estonia, France, Germany, Italy, Greece, Portugal, Slovakia, Slovenia and Spain.