Financial Transaction Tax: European Commission Draft Directive on Financial Transaction Tax

Sullivan & Cromwell LLP - October 4, 2011
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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.