European Commission sets out details of FTT
The European Commission has now published its detailed proposals for an EU Financial Transaction Tax to be implemented under the "enhanced cooperation procedure" across France, Germany, and nine other EU Member States. Disappointingly, although somewhat expected the scope of the tax is very wide and it is proposed that securities lending and repo transactions will be subject to the tax on one leg of the transaction at 0.1%.
The ISLA Tax Group has been following developments and we will be considering what actions we may take to try and get a more appropriate outcome for securities lending transactions. We expect there to be considerable discussion and negotiation between the member states through 2013 and that it is likely that the measures proposed will change. We also believe that the timetable proposed by the Commission is extremely optimistic.