EU Plans Transaction Tax Based on Traders’ Base, FTD Says

Discussion in 'Wall St. News' started by Dogfish, Sep 9, 2011.

  1. Dogfish


    Sep 9, 2011

    <B>EU Plans Transaction Tax Based on Traders’ Base, FTD Says</b>

    The European Commission plans to prevent banks and other investors from avoiding a planned tax on trades by imposing it in the trader’s home country rather than the place of the transaction, Financial Times Deutschland reported, citing unidentified people close to the Commission.
    The Commission will propose rates close to 0.1 percent for trades in stocks and bonds and 0.01 percent for dealing in derivatives, FTD said. The tax would apply to companies based anywhere in the European Union and would also count for transactions done in the U.S., according to the report.

    (Reuters) - German Finance Minister Wolfgang Schaeuble and his French counterpart Francois Baroin sent a letter to the European Union's executive arm on Friday containing draft financial transaction tax proposals, a ministry spokeswoman said.

    "Earlier today Minister Baroin and Minister Schaeuble sent a joint letter to the (European) Commission," she said. "In it are drafts of the (proposal's) content."

    0.01% of EUR100,000 (bund contract) is 10EUR no?
  2. sheda


    PARIS (Dow Jones)-Euro-zone countries could generate between EUR20 billion and EUR40 billion to support their bailout fund by introducing a tax on financial transactions, a French government minister said Thursday.

    "We wouldn't weaken European markets and we would bring in between EUR20 billion and EUR40 billion," Leonetti said in an interview airing Saturday on French television channel France 24.

    It would be better for all G-20 countries to adopt a financial transaction tax, but if that doesn't happen, the euro zone should go it alone, he said.
  3. GATT


    switch to US broker
  4. Dogfish


    HA! I hope they've done their 20-40bil calculation based on 2% of current derivative volumes

    Re Gatt: US broker? You mean US product surely as they will tax you from US if trading European products plus they are gunning for G20 approval, Obama would love it. Especially now the IMF are on board promoting it.
  5. GATT


    What happens when I trade US products with an European broker ?

    btw I don't think this FTT will happen in the near future :)
  6. If it's 10 EUR for 1 Bund then would this screw the HFT/Algo/MM as they would have to take at least 2 ticks per trade to realise a profit?
  7. it would widen and thin out almost all markets because it would cripple most spread traders- and i believe the 10$ would be on the in and the out making it 20$ RT tax. think about trying to spread yield curve with those taxes... if you think there is a debt liquidity crisis now... just hold on to your hats.
  8. sheda


    The only thing that matters is where you live. If you live in Germany and for example they were the only country to impose an FTT, as your living in Germany it does not matter where you trade, you can trade the German markets with a German broker or a foreign market with a foreign or German broker you are liable for the tax either way, if you live out side of Germany you can trade the German markets FTT free.

    That is my understanding, it is funny they are now saying they want to design it to "avoid discouraging trading" yet not to long ago the discouraging of trading was an aim of there's, they have just been told where to go by Asia and some other people with sense, they are backed into a corner which makes them more stupid than ever...

    Today it looks to me like the country's in the EU who agree to it will have it, while those who don't will operate without it, financial institutions may move from infected areas to Britain and other such country's while those without the means to relocate are screwed.
  9. If it's implemented at all it will be with everyone (all countries) together.

    The whole business has got way out of hand and needs to be brought back into line.

    It's clearly down to the HFT/Algo crowd.

    Easy Solution - slow trading down to sensible levels and ban anyone instantly who is caught using predatory trading tactics.

    ie quote stuffing,flipping etc etc etc
  10. GATT


    I don't believe that, for example, an US broker collects the tax from his german clients and sends it to the German tax authorities !
    #10     Sep 9, 2011