Europe’s plan for an expansive financial transaction tax hit a wall after the top legal adviser to finance ministers concluded it exceeds national jurisdiction, “infringes” on EU treaties and discriminates against non-participating states.
The unusually blunt paper from the EU Council legal service, obtained by the Financial Times, deals a heavy blow to a European Commission proposal to introduce a €35bn eurozone levy with global reach.
While the conclusions are non-binding, the strength of the legal objections is likely to accelerate moves to scale back the design of any common levy. A new version could more closely resemble a stamp duty, which taxes securities based on where they are issued. British officials said the paper “vindicated” their decision to mount a separate legal challenge.