E.U. lawyers say proposed financial transaction tax exceeds jurisdictional limits

By Sam Obenhaus

The European Union’s plan to implement a harmonized financial transaction tax (FTT) likely violates customary international law, according to an E.U. Council legal service memorandum obtained by the Financial Times.  The non-binding opinion finds FTT “exceeds member states’ jurisdiction” by taxing covered transactions made by E.U.-headquartered companies and their counterparties regardless of where the trades were executed.  As a result, trades made outside E.U. jurisdiction, including New York, would be subject to the tax.  The proposal, which is designed to reduce tax avoidance, is still supported by the E.U. Tax Commissioner, Algirdas Semeta, who continues to defend FTT’s legality.

Read more on this story at the Financial Times.

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