Watch out if you live in London, as new EU taxes might influence your financial transactions. This is the news coming from the European Commission as it proposes a large scale new EU tax. Spearheaded by Jose Manuel Barroso, the European Commission president, the law would apply to “all types of financial instruments” that are being used by European investors.
Pushing for the Tax
The main countries pushing the measure include France and Germany, while British diplomats have said that they will block a transaction tax that hits across the 27 EU states. Those who know Mr. Barroso’s tactics well say that he may continue with the plan while allowing those states that want to opt out to do so.
The tricky, and hotly contested part, of the plan is that it includes a broad definition of tax residency. So, if a transaction involves one EU state and one state outside of the EU, they would be hit with the tax even if the interaction took place in London, Asia or the United States. As the draft for the proposal said, “When transactions are carried out on trade venues outside the EU, they will be subject to tax if at least one of the establishments carrying out or intervening in the transaction is located in the EU.”