Global Tax Alert | 3 June 2013

EU financial transaction tax - latest developments

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On 30 May 2013, it is being reported that a major scaling back of the proposed EU financial transaction tax (EU FTT) is being proposed. While there have been no official pronouncements, there appears to be speculation that the EU FTT may apply from 2014 to equities only, and not to derivatives and debt instruments as currently proposed.

In addition, reports suggest that the rate at which the tax applies may be considerably lower than is currently proposed, with expected revenues reduced to a tenth of earlier estimates. The tax could then be extended to bonds up to two years later, and derivatives some time after that, if at all.

While the news is speculative at this stage, this suggests that policymakers have revised their expectations in view of the barrage of criticisms against the tax.

Considerable challenges are expected to remain. In particular, it may be optimistic to expect that financial markets participants will be able to adjust their systems in time to accommodate a 2014 start date, even for a “slimmed down” EU FTT that applies to equities only. Additionally, it is not at all clear that changes such as these would fully address concerns that have been raised about the practical enforceability of the tax outside the 11 participating Member States.

Future Alerts will provide details as they become available.

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United Kingdom), London
  • Rod Roman
    +44 20 7951 1549
    rroman@uk.ey.com
  • Mark Persoff
    +44 20 7951 9400
    mpersoff@uk.ey.com
  • Geoff Lloyd
    +44 20 7951 8736
    glloyd@uk.ey.com
  • Jonathan Richards
    +44 20 7951 6428
    jrichards@uk.ey.com
  • Nigel Nelkon
    +44 20 7951 6011
    nnelkon@uk.ey.com
  • Fiona Thomson
    +44 20 7951 3913
    fthomson@uk.ey.com
EY Steuerberatungs - und Wirtschaftsprüfungsgesellschaft mbH, Vienna
  • Thomas Wilhelm
    +43 1 21170 1398
    thomas.wilhelm@at.ey.com
EY Société d’Avocats, Paris
  • Nacéra Beniken
    +33 1 55 61 10 69
    nacera.beniken@ey-avocats.com
  • Matthieu Dautriat
    +33 1 55 61 11 90
    matthieu.dautriat@ey-avocats.com
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt
  • Volker Bock
    +49 6196 996 27459
    volker.bock@de.ey.com
EY Abogados, Madrid
  • Adolfo Zunzunegui Ruano
    +34 91 57 27 889
    adolfo.zunzuneguiruano@es.ey.com
Studio Legale Tributario in association with EY, Milan
  • Marco Ragusa
    +39 028 814 926
    marco.ragusa@it.ey.com
EY, S.A., Lisbon
  • Nuno Bastos
    +351 217 912 000
    nuno.bastos@pt.ey.com
EY Belastingadviseurs LLP, Amsterdam
  • Willem-Jan van Veen
    +31 88 407 2092
    willem-jan.van.veen@nl.ey.com
Ernst & Young LLP, Financial Services Desk, New York
  • Miles Humphrey
    +1 212 773 1425
    miles.humphrey@ey.com
  • Raffaele Gargiulo
    +1 212 773 3505
    raffaele.gargiulo@ey.com
  • Sarah Belin-Zerbib
    +1 212 773 9835
    sarah.belinzerbib@ey.com
Ernst & Young LLP, French Tax Desk, New York
  • Daniel Brandstaetter
    +1 212 773 9164
    daniel.brandstaetter@ey.com

EYG no. CM3491