Financial Transaction Tax: European Commission Draft Directive on Financial Transaction TaxSullivan & Cromwell LLP - October 4, 2011
The European Commission has published its proposal for a financial transaction tax.
The tax would be paid
- by financial institutions
- on transactions in financial instruments
- if at least one of the parties were located in the EU.
Sales and purchases of shares and bonds would be taxed at 0.1%, derivative contracts at 0.01%. The tax would be introduced from the start of 2014. Part of the revenue would belong to the EU; the rest would be retained by member states.
The Commission, France and Germany are willing to introduce a financial transaction tax at EU level. The UK and Sweden oppose such a tax if it is not global in scope. The German finance minister suggested recently that it could be implemented in the eurozone before the rest of the EU.