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Friday, April 19, 2013

Game on - UK Government launches legal challenge against controversial EU Financial Transaction Tax

It has just been announced that at midnight last night the UK government submitted a challenge against the financial transaction tax to the European Court of Justice. The ground being that it impacts (taxes) firms and individuals located in the UK outside the FTT zone.

We’ve put together a very comprehensive analysis on what this challenge means and what could happen next. Read it here.

Here’s the summary of the key points:
Summary: The UK has today announced a legal challenge at the European Court of Justice against the EU’s controversial financial transaction tax (FTT). Despite the British Government having chosen not to participate in the measure, UK financial firms that trade with an institution in a country that does participate will still be taxed. This, the UK claims, violates EU law and is inconsistent with international tax norms.

The economic, legal and political implications of this move for future EU-UK relations are huge. As currently drafted, the tax could cost fund managers (UCITS) based outside the FTT-zone around €5.6bn while one third of all derivatives trades in the UK could be caught by the tax. Legally, it could set out the parameters for how a “flexible Europe” involving different levels of participation in the EU – which Prime Minister David Cameron has said he champions – will be governed. Politically, it’s a test of the extent to which the UK – as a non-eurozone member - can halt or change EU measures with a profound impact on its national interest. Therefore, it will be a key issue in the on-going debate about the UK’s continued EU membership, though other EU countries have also expressed concerns about the impact of the tax.


Anonymous said...

It is about time too. The EU has truly overstepped their authority with this stupid FFT.

Now where is our referendum so we can leave this disgraceful and pathetic organisation?

Rik said...

What I expect to see is that the borrowers move to the UK (so the financing figures move over the Channel. At least for the private sector.
Which will give a lot of extra work in the UK next to the simple trade. What is the use to have it in France or Germany?

Anonymous said...

Good luck at this completely independant court that has "nothing at all to do with the EU".

European Court of Justice:

Flag: Blue background with 12 yellow stars.

Anthem: Beethoven's "Odé To Joy".

christina speight said...

The French - in their anti-UK vendetta mood - are dead keen on this,

But second thoughts are rife - see EU Observer today (Mon) on
EU governments get cold feet on transactions tax - 22/04/2013 09:29:53
The prospects of an EU tax on financial transactions have been rocked amid
confusion over how the tax would work and a legal challenge from the UK.


In addition many other non-european countries are getting very concerned,

Finally this seems a strange moment to launch BfB when our own government has finally woken to the disaster being cooked up in Europe for us. The Financial Transaction Tax is designed to cripple the City of London regardless of the economic chaos this would cause world-wide. We have filed preliminary papers with the ECJ asking that court to declare the tax illegal. The record of that court does not inspire confidence for it has a pronounced tendency to judge all maters, not on the case before the court, but on whether or not it promotes ‘ever closer union’.

Rollo said...

This action is being heard where? In the Orwellian-named European Court of Justice, the enforcement arm of the EU with the pledge to seek ever-closer-union.
The only solution is to get out of the EU.