Sarah Jane Leake | Bloomberg Law Proposal for a Council Directive on a common system of financial transaction tax and amending Directive 2008/7/EC – European Commission Proposal COM(2011) 594 final of 28 September 2011 The European Commission has been exploring the idea of taxing the financial sector at EU level for several years. In a Communication published last October, the Commission put forward two possible ways to tax the financial sector – a financial transaction tax (FTT) on all transactions on all financial instruments between financial institutions or a financial activities tax (FAT) on corporations to tax excess profits and compensation. In response to calls from the European Parliament1 and the European Council to further explore the feasibility of introducing a FTT at both European and international level, the Commission has now published a formal proposal for a Directive introducing a common framework for a tax on financial transactions in all 27 Member States. In the Commission's estimation, the FTT would raise approximately €57 billion each year. If effective from 1 January 2014 as planned, the FTT would therefore raise an additional €285 billion before the end of the decade. Revenues of the tax would be shared between the EU and its Member States.
Rational for Tax in the Sector
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