EU financial transaction tax

The European Union financial transaction tax (EU FTT) is a proposal made by the European Commission to introduce a financial transaction tax (FTT) within some of the member states of the European Union initially by 1 January 2014, later postponed to 1 January 2016, then to the middle of 2016 and then to September 2016. In October the European Commission was instructed to draft the tax by the end of 2016.

The proposed EU financial transaction tax would be separate from a bank levy, or a resolution levy, which some governments are also proposing to impose on banks to insure them against the costs of any future bailouts. The tax that could raise 57 billion Euros per year if implemented across the entire EU was however a controversial topic for the EU member states to agree upon ever since it was first time debated in June 2010. In October 2012, after discussions had failed to establish unanimous support for an EU-wide FTT, the European Commission proposed that the use of enhanced co-operation should be permitted to implement the tax in the states which wished to participate. This framework proposal, supported by 11 EU member states, was approved in the European Parliament in December 2012, and by the Council of the European Union in January 2013.

According to early plans, the tax would impact financial transactions between financial institutions charging 0.1% against the exchange of shares and bonds and 0.01% across derivative contracts, if just one of the financial institutions resides in a member state of the EU FTT. To avoid an unwanted negative impact on the real economy, the FTT will not apply to:

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