Tax and the City: October 2011 update

Financial transactions tax

The European Commission has now published its proposal for an EU-wide financial transactions tax (FTT) in the form of a draft Council Directive and it is starting to look like it may become a reality notwithstanding the UK’s current opposition to such a tax unless implemented globally (not much progress on this at the recent G20 talks in Paris apparently) and its power of veto.

Cutting through the bank-bashing rhetoric and gripes about existing under-taxation of the financial sector because of its generous VAT exemptions the salient features of the proposed new tax (applicable from 1 January 2014) are as follows:

• The tax would be payable on any ‘financial transaction’ – meaning...