Lawyers Deem Financial Transaction Tax Illegal
A Financial Transaction Tax (FTT), which is currently set to be implemented in 11 EU countries, has now been claimed to be illegal by lawyers.
The UK is not one of the countries set to implement the FTT, remaining strongly opposed. This is one contributing factor to the 14 page legal opinion that the team of lawyers produced. They contend that as the FTT would not be implemented across the EU, it would cause “distortion of competition to the detriment of non-participating member states”
The FTT, which will impose a 0.1% tax on stocks and bonds and 0.01% on derivative contracts, is also said to exceed the powers of the member states and infringe on the rights of non-participating members. The International Securities Lending Association has also criticised the proposals, claiming it could destroy up to 65% of Europe’s lending activity.
The legal opinion is not binding. However, if challenges are taken to court, they do indicate that the proposals are likely to be defeated.