The tax will apply to any transaction with established links to the FTT zone, and both the seller and the buyer will have to pay.
The Investment Management Association (IMA) has raised concerns about the impact it will have on UK investors, pensions and funds that commit to securities domiciled in one of the 11 EU member states to have signed up to the tax, or if they undertake transactions with counterparties in those countries.
Shares and bonds will be taxed at a rate of 0.1%, and the derivatives rate will be 0.01%.
Julie Patterson, IMA director of authorised funds and tax, added: ““It is important to ensure that the tax doesn’t hit every transaction multiple times where intermediaries are involved. It is not uncommon for there to be four or more intermediaries involved in a transaction, making what appears on the surface to be a 0.1% tax significantly more substantial.”
Designed to ensure that the financial sector makes a fair and substantial contribution to public revenues, the tax is expected to produce revenues of between €30bn and €35bn a year.
Algirdas emeta, commissioner responsible for taxation, said: "With the proposal, everything is in place to enable a common financial transaction tax to be become a reality in the EU. On the table is an unquestionably fair and technically sound tax, which will strengthen our single market and temper irresponsible trading. Eleven member states called for this proposal, so that they can proceed with the FTT through enhanced cooperation. I now call on those same member states to push ahead with ambition – to drive, decide and deliver on the world’s first regional FTT."
The countries to have signed up are Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.
