On 18 February, the Economic and Financial Affairs Council discussed the proposal for an EU-11 financial transaction tax (FTT). Under the current proposal, financial entities based in non-participating countries, such as the UK, could still be subject to the FTT for a wide range of transactions.
Law Society chief executive Desmond Hudson has written to key European ministers to raise the Society’s concerns about the rights of countries that have chosen not to participate. He said: ‘We firmly believe that any legislation should respect the EU treaties and the decision by a majority of countries not to participate. The point is that the extraterritorial effects of the proposed tax would in effect force a degree of participation on those countries.’
The Law Society also has a number of technical concerns. Gary Richards, chair of the Law Society’s Tax Law Committee, said: ‘To prevent avoidance, the EC has proposed that in principle each leg of a transaction is subject to the tax and that each party is jointly and severally liable to pay. Essentially, this means that the costs will be much higher, as is the likelihood that the tax will be passed onto non-financial parties, such as businesses and pension savers.’
On 18 February, the Economic and Financial Affairs Council discussed the proposal for an EU-11 financial transaction tax (FTT). Under the current proposal, financial entities based in non-participating countries, such as the UK, could still be subject to the FTT for a wide range of transactions.
Law Society chief executive Desmond Hudson has written to key European ministers to raise the Society’s concerns about the rights of countries that have chosen not to participate. He said: ‘We firmly believe that any legislation should respect the EU treaties and the decision by a majority of countries not to participate. The point is that the extraterritorial effects of the proposed tax would in effect force a degree of participation on those countries.’
The Law Society also has a number of technical concerns. Gary Richards, chair of the Law Society’s Tax Law Committee, said: ‘To prevent avoidance, the EC has proposed that in principle each leg of a transaction is subject to the tax and that each party is jointly and severally liable to pay. Essentially, this means that the costs will be much higher, as is the likelihood that the tax will be passed onto non-financial parties, such as businesses and pension savers.’
