Tax on financial transaction?

12.05.2014

Directive on tax on financial transactions, introduced by European Commission in February, 2013 still has no support from EU member-states. The original proposal from the Commission was the imposition of the single tax of0,1% for the entire territory of EU for all financial instruments excluding derivatives.

UK went to the Court of EU with an action for annulment of the Council’s decision that allowed 11 member-states to implement actions in order to impose tax on financial transactions. The Court dismissed UK claim.

Greece as a president of Council has already organized two meetings aiming to reach the consensus on the tax formulation and tax size. Meeting of ECOFIN Council in May had no results. The next meeting is scheduled for the 20^th of June, 2014.

Source: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/142427.pdf

Expert’s opinion

The question of taxation on financial transactions was not raised for the first time. In order for the law to be in force it should be approved by all 11 member-states of the “newly created” tax zone. Obviously, if no consensus was reached until now than the imposition of this kind of tax does not seem like a necessary and reasonable measure. There are too many questions, answers to and reasoned justification from an economic point of view(it is crucial to understand who will be the taxpayer, who will be exempted, how will be taxation regulated for transnational companies, etc.) for which should be given. But it seems like to be obvious only for Great Britain.

Anna Shevchenko ( Lawyer, Honest&Bright)