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Clifford Chance

The European Commission's financial transaction tax proposal – what it means for investors and institutions in Europe and worldwide

Client Briefing

14 February 2013

The European Commission today published its detailed proposal for an EU Financial Transaction Tax to be implemented under the "enhanced cooperation procedure" across France, Germany, and nine other EU Member States. If adopted, most equity, debt and derivative transactions in these jurisdictions will be subject to the tax – from as early as 2014.


As we predicted in our January briefing, the tax has wide extra-territorial effect. Pension funds, insurance companies, unit trusts, banks and businesses in the UK, Ireland, Luxembourg and worldwide will be subject to the tax on many of their transactions. The "cascading" design of the tax means that its effective rate will be considerably higher than the headline rates.


We ask: what implications will this have for financial markets in the EU and worldwide? And will such an extra-territorial tax survive legal challenge?

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The European Commission's financial transaction tax proposal – what it means for investors and institutions in Europe and worldwide

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