Embarking on a lonely and uncertain course, France’s long-awaited, much debated tax on financial transactions (FTT) finally entered into force on 1 August 2012.
Supposedly prefiguring the introduction of a mechanism at European level, a 0.2% tax is to be imposed on transactions in French securities where stock market capitalization exceeds EUR1bn and a 0.01% tax is to be levied on credit default swaps and on speculative “automated” trading.
Under the initial plans, a 0.1% tax was to be imposed on financial transactions, if possible at global level, otherwise at least at EU level. Under plans outlined by the European Commission in September 2011 a 0.1% tax would be imposed on the trading of shares and bonds, while a 0.01% rate would apply to other products. To mitigate the risk of relocation, the levy would be imposed on the financial institution at their place of residence. The tax would apply in all 27 EU member states from January 1, 2014.
