The UK has launched a legal challenge in the European Court of Justice to the planned financial transactions tax. This tax is to be introduced by eleven European countries under the EU provisions for enhanced cooperation and is planned to go into effect as from 1 January 2014. The planned rate of tax is 0.1% for transactions in shares, bonds, units of collective investment funds, money market instruments and securities lending agreements; and 0.01% for contracts for derivative products.
Although the UK is not one of the countries implementing the tax it is concerned about extra-territorial provisions of the tax and its effect on UK resident institutions operating in other European countries. The countries proposing to introduce the tax are Austria, Belgium, Germany, Estonia, France, Greece, Italy, Portugal, Slovakia, Slovenia and Spain. The UK is considers that more detailed information should be given as to how this financial transactions tax is to be collected and the consequences for subsidiaries outside the zone where the tax is to be imposed.
