The first steps to the Reform of the European Tax System. Financial Transaction Tax.

14.05.2012 On May 4, 2012 the European Commission published at its official site seven expository documents, clarifying  a  stage by stage system of implementation of a tax imposed on the financial transactions in to the European tax system.

In these documents there is an analysis of the contribution of a financial sector in the development of the European economics, the principles of tax on financial transactions payment, its macroeconomic effect.  

The most of the European countries (26 from 27), excluding Great Britain, do not object the implementation of this tax.

Due to this tax, as per calculations of the  EC, the budgets of European countries will be replenished by 55 billion Euro annually. The tax rate, as expected, will be 0.1% out of an amount of a  transaction, if we are speaking about shares and bonds. Operations with other financial instruments will be taxed at a  rate of 0.01%.

Such levy is aimed to banks, investment, broker and insurance companies, pension and hedge funds.

Expert’s opinion

“Nowadays, the Euro-zone has a deep debt crisis, that’s why the implementation of such tax is a result of not just an intention to strengthen the regulation of markets and to begin a fight with wildcatters but also a real chance to replenish  adverse state budgets.

At the present time, taking of such measures as: a tax on financial transactions, Eurobonds, emerging role of the European Commission, toughening of budgetary  discipline and  the increase of a stab fund may help Europe to get rid of debts.

In spite of the fact, that this tax is a serious barrier for banking structures, we see, that most  countries agreed to enter it. Unfortunately, it is necessary to go extremes even if it is a hot button.”

Irina Andrianova ( Senior Legal Adviser of the Department of Legal Support and Relationship Banking)