Legal adviser outlines barriers to financial transaction levy

EU taxation commissioner Algirdas Semeta deals heavy blow to proposal

EU taxation commissioner Algirdas Semeta.
EU taxation commissioner Algirdas Semeta.

Europe’s plan for an expansive financial transaction tax hit a wall after the top legal adviser to finance ministers concluded it exceeded national jurisdictions, “infringes” on EU treaties and discriminates against non- participating states.

The unusually blunt paper from the EU council legal service deals a heavy blow to a proposal to introduce a €35 billion euro zone levy with global reach.

While the conclusions are non-binding, they are likely to accelerate moves to scale back the design of a common levy. A new version could more closely resemble a stamp duty. Algirdas Semeta, EU tax commissioner, defended his policy on Twitter: "FTT is legally sound and fully complies with EU treaties and international law." – (Copyright The Financial Times Limited 2013)