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The EU’s controversial “Tobin Tax” on financial transactions has been dealt a severe blow after the EU Council’s legal service judged the proposal “infringes” EU treaties and is “discriminatory” to states which do not take part, reports the Financial Times
The proposal, which has the backing of 11 Eurozone states including France, Germany and Spain, has lost momentum in recent months due to concerns over implementation and a legal challenge by the UK.
The legal service advice is not binding but claims that a key clause, which seeks to tax institutions according to the geographic location of their HQs rather than where the trade is completed, “exceeds member states’ jurisdiction for taxation,” reports the daily –
It added that the measure “is not compatible” with the EU treaties “as it infringes upon the taxing competences of non-participating member states”.
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