A European Financial Transactions Tax
A European financial transactions tax moves closer.
Finance ministers from 10 countries said in a joint statement in May that their countries will impose a financial transactions tax starting January 1, 2016. The 10 countries are Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia and Spain. The tax will apply initially to transfers of shares and other equity instruments and to some derivatives transactions and then be expanded over time. The countries are expected to finalize details of the tax by the end of this year.
The European Union has been talking about such a tax since September 2011. The original proposal was for a tax of at least 0.1% on the trading of shares and bonds and a tax of at least 0.01% on derivatives. For cross-border transactions between one party in a country with the tax and another in a country without the tax, the party in the country with the tax would be expected to pay the tax for both parties.
The United Kingdom and Sweden oppose the tax and have complained about its extraterritorial reach.
France and Italy have moved ahead in the meantime with a tax without waiting for the other countries. France has been collecting a 0.2% tax on acquisitions of shares in French-listed companies with market capitalizations of more than €1 billion since August 1, 2012. Italy began imposing a tax on transfers of shares and other equity positions on March 1, 2013.
by Keith Martin