13 February 2013

FT: US banks warn over planned EU 'Tobin tax'

Wall Street and US businesses have attacked a proposed eurozone financial transaction tax, claiming it overreaches borders, flouts international treaties, and "breaks the bonds that bind our global economy".

While the commission is confident the plan is legally sound, the long arm of the levy has raised the hackles of big investment banks, as well as the UK and Luxembourg, which rejected such an EU-wide tax. If France, Germany and nine other states press ahead with a tax based on the commission’s expansive proposal, it is likely to be challenged by some EU governments and big financial groups, according to several diplomats and lawyers.

A coalition of US business groups – including the US Chamber of Commerce and The Financial Services Forum, the body for the largest US financial groups – have written to the commission objecting to “the unilateral imposition of a global financial transaction tax. These novel and unilateral theories of tax jurisdiction are both unprecedented and inconsistent with existing norms of international tax law and long standing treaty commitments”, the groups argue in a letter to Algirdas Semeta, the EU tax commissioner.

Those countries that have expressed interest in a transaction tax include Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia.

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