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European financial transaction tax stalled

There may be a six month delay in the launch of a finance transaction tax for Europe, thanks to a stall in discussions amongst a European working group, amid criticism from stakeholders.

If the change does go ahead, it is another aspect of the books that an accountant on the Wirral, or elsewhere in the UK, will have to take into account.

Initially, the FTT was designed to be a 0.01 per cent sweeping levy on derivatives, bonds and shares across the entire EU, with the intention to put a stop to speculative trading. It should also prompt finance companies to make repayments on the funding they receive from the government, amid the economic crisis.

A group comprising 11 member states, including Germany and France, has negotiated the tax after EU discussions collapsed last year, with certain members expressing strong disagreement, such as Denmark, Sweden and the UK. They were concerned that there would be an effect on financial competitiveness for the EU.

TMF Group head of tax, Richard Asquith, commented on the news:

“This tax has been rushed in design and implementation, so a delay of at least six months would be no surprise. The countries involved will have to listen more closely to the markets and other countries if they are to get this right.”

Previously, the tax had received criticism from Asquith who said it was too ambitious and that the best way to move forward would be to start without any complexity attached.

Posted by Mark
July 2, 2013

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