1/4% Tax on all stock trades pushed in NY Times today

Quote from bjw:

plus there are some pretty hefty double taxation problems

what if an investor trade shares with a ftt-trader on the london stock exchange? he would have to pay BOTH the UK Stamp Tax AND the EU FTT. this is going to go crazy.

it's exactly the way how one would design an FTT when most of the world is signing up, and you want to force the remainder of the world to follow suit. if enforced, there's a lot of incentive for the non-ftt countries to also join. You have to collect the tax anyway for others, why not simply join and at least make a buck out of it. This FTT is clearly designed as a global tax and it's the only way it can be applied without creating huge double taxation and collecting problems; considering it's adopted by only 11, mostly mediocre, euro-countries makes it a huge huge bluff though.
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They are not trying to make other countries collect. They are trying to make EU11 institutions keep a book of their worldwide transactions and submit a report every month with calculations and everything... The EU taxman would just have to make controls of reports. And tax directly for EU issued products, like they are trying to do with ADRs.

IMO other countries would be quite safe if they force their citizens to avoid EC11 issued products. 95 % of the world trading has no link to an EC11 territory.
 
Quote from TraDaToR:

IMO they are not trying to make other countries collect. They are trying to make EU11 institutions keep a book of their worldwide transactions and submit a report every month with calculations and everything... The EU taxman would just have to make controls of reports.
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I am not concerned that I might be an unwitting party to a trade involving someone liable to an EU 11 FTT. Caveat emptor would not apply due to caveat venditor, or in other words you can't stick me with a charge for something you did not expressly warn me about.

Now some CYA brokers might play safe and collect just in case, but they will see the light when business declines.

I am more concerned that despite all the talk about QMV, it never came to that. I might have missed something, but to simplify things drastically, it turned out to be 'oh alright, we won't talk about it anymore, just go ahead and do it as long as you don't hurt us'.
 
Quote from TraDaToR:

They are not trying to make other countries collect.
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i disagree about this. in the press conference a journalist asked semeta to consider the case of a danish party (non ftt) trading a german bond with a swedish party (non ftt) at the kopenhagen exchange. the journalist asked why semeta would expect any one to collect the ftt here, as the trade took place outside of the ftt zone.

semeta replied he did expect the tax to be collected by other non-ftt nations, as this only builds on existing tax law. he mentioned the example of a us company buying software from a belgian software company, and the us government collecting vat on behalf of the belgians (i don't know if this is correct, it's semeta's example, not mine). this example is also mentioned in the q&a-doc that accompanied the proposal on the europa-website. i think it's a pretty weird example, but regardless, semeta is definitely expecting non-ftt countries to do some of the dirty work for him.
 
Quote from bjw:

i disagree about this. in the press conference a journalist asked semeta to consider the case of a danish party (non ftt) trading a german bond with a swedish party (non ftt) at the kopenhagen exchange. the journalist asked why semeta would expect any one to collect the ftt here, as the trade took place outside of the ftt zone.

semeta replied he did expect the tax to be collected by other non-ftt nations, as this only builds on existing tax law. he mentioned the example of a us company buying software from a belgian software company, and the us government collecting vat on behalf of the belgians (i don't know if this is correct, it's semeta's example, not mine). this example is also mentioned in the q&a-doc that accompanied the proposal on the europa-website. i think it's a pretty weird example, but regardless, semeta is definitely expecting non-ftt countries to do some of the dirty work for him.
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OK.My bad. That's for the issuance part. The resident part would likely be reported directly by EU institutions.
 
Quote from bjw:

i disagree about this. in the press conference a journalist asked semeta to consider the case of a danish party (non ftt) trading a german bond with a swedish party (non ftt) at the kopenhagen exchange. the journalist asked why semeta would expect any one to collect the ftt here, as the trade took place outside of the ftt zone.

semeta replied he did expect the tax to be collected by other non-ftt nations, as this only builds on existing tax law. he mentioned the example of a us company buying software from a belgian software company, and the us government collecting vat on behalf of the belgians (i don't know if this is correct, it's semeta's example, not mine). this example is also mentioned in the q&a-doc that accompanied the proposal on the europa-website. i think it's a pretty weird example, but regardless, semeta is definitely expecting non-ftt countries to do some of the dirty work for him.
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Indeed a very strange example. If you buy direct from the Belgian company, VAT would be included in the invoice. If a US company is a reseller, they would be invoiced by the Belgian principal VAT inclusive.
 
i looked it up in the Q&A, i had the example the wrong way:

Does the proposed FTT respect the relevant territoriality rules?

Yes. The proposed FTT for the 11 Member States is fully in line with international law and EU taxation principles. Taxing cross-border services is a well-established principle in taxation. VAT can be used as a comparative example of how this works. When a Belgian citizen buys software on the internet from an American company, the software is taxed at the Belgian rate.

Moreover, many national financial sector taxes are based on the issuance principle and therefore apply to transactions which take place outside their own territory, once the financial product traded has been issued on their territory. The same ideas apply to the FTT proposed. As long as there is an established link between the transaction and the territory of a participating Member State, it is legal to charge this tax. Nonetheless, the proposal includes a general rule allowing the person liable to pay the FTT to prove that the link between the transaction and that territory ("economic substance clause") is insufficient, and that they therefore do not have to pay the tax.

more questions with answers about the ftt here: http://europa.eu/rapid/press-release_MEMO-13-98_en.htm
 
IMO the "economic substance clause" will have to be explained so that we know which products are potentially liable on every exchange. "Proving to the EU" makes no sense.Once the list is known, EU people will be screwed but international finance will know which products to avoid.

But we are talking worst case scenario here. Germany has not approved this proposal...Oh no...It would kill Eurex overnight
 
Quote from bjw:

i looked it up in the Q&A, i had the example the wrong way:
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But you are right, they need foreign countries cooperating when there is no EU instit in the transaction.
 
There is a presentation with a few examples and some interesting information

http://ec.europa.eu/taxation_customs/resources/documents/taxation/enhanced_cooperation_ftt.pptx

Apparently trading in shares and bonds is expected to drop by 15% while derivatives trading is expected to drop by 75%.

And I particularly like this one:

"Occurrences of double taxation:

- Within FTT jurisdiction: NO!

- Between FTT and non-FTT jurisdiction: Possible, but …
… only for as long as not all Member States have joined the FTT jurisdiction."
 
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