European Financial Transaction Tax Proposal


On February 14, the European Commission released draft text for a proposed financial transaction tax directive. If the text is implemented into law a financial transaction tax (FTT) will be payable to the tax authorities in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia, Slovakia and any other European Union Member State that chooses in due course to participate (Participating States).

The proposal for a directive seeks to apply the FTT to financial transactions carried out by financial institutions that are party to the financial transaction, either for their own account or for the account of other persons, or acting in the name of a party to the transaction. The FTT applies to transactions where a party is deemed to be established in a Participating State (the residence principle) and also where financial instrument traded in the transaction is issued in a Participating State (the issuance principle).

The rate of taxation is not to be lower than 0.1% of the taxable amount for financial transactions that are not related to derivative contracts and 0.01% of the taxable amount for financial transactions that are related to derivative contracts. Any Participating States which currently impose a tax on financial transactions are prevented under Article 15 of the FTT from maintaining such a tax or from introducing a new financial transactions tax.

More information is available here and here.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katten Muchin Rosenman LLP | Attorney Advertising

Written by:


Katten Muchin Rosenman LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.