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Clifford Chance

The new EU Financial Transaction Tax: why it seems set to impact financial institutions worldwide, and why legal challenges are likely

Client Briefing

23 January 2013

Yesterday's ECOFIN meeting resolved to use the "enhanced cooperation procedure" to implement an EU financial transaction tax across France, Germany, and the nine other EU Member States that wish to do so. Most equity, debt and derivative transactions in these jurisdictions will be subject to the tax – from as early as 2014.

The FTT looks likely to have wide extra-territorial effect – those who hoped London wouldn't be affected look to be disappointed; many in the US and Asia may be surprised to find themselves subject to the tax.

We look at some surprising features of the FTT's design and ask: what implications will this have for financial markets in the EU and worldwide? And is the FTT vulnerable to legal challenge?

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The new EU Financial Transaction Tax: why it seems set to impact financial institutions worldwide, and why legal challenges are likely

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