Luxembourg backs UK in opposing Financial Transaction Tax

The Finance Minister of Luxembourg Luc Frieden has backed Britain’s challenge to the controversial Financial Transactions Tax (FTT).

Mr Frieden, who is also a governor of the World Bank, said Luxembourg is “very sympathetic” to the UK’s objections and pledged to support the country’s bid to block the levy. The political rhetoric follows the launch of legal proceedings by Britain against the €35 billion tax on financial transactions, marking the first serious challenge to the policy since it was proposed in 2011.

“We will certainly bring arguments in support of the case being brought by the UK government,” Mr Frieden told the City Week forum, a financial services conference in London.

The opposition is also backed by Thomas Donohue, the Chief Executive of the US Chamber of Commerce, as well as several private sector firms who are likely to be adversely affected by the new tax. Our own figures recently found that trading volumes in Italy have been cut by 38% already since it launched FTT in March, with German and Spanish volumes increasing from the same date. In Hungary, less than half the revenue the state had hoped for has been raised since implementing the 0.1% tax at the start of the year, exposing cracks in the system.

Mr Donohue warned that global regulations were “diverging at a time when they need to be converging”. Talking to The Telegraph, he added: “Let’s not forget why we have the capital markets in the first place: to help the private sector deliver growth, jobs, innovation and opportunity.”

TMF Group has offices across Europe where our local experts can help with any taxation concerns. We will also be keeping track of developments in regards to the FTT, and documenting movements via our news feed and press coverage.

 
Article

Keeping up to date

You can now receive our insights and regulatory updates direct to your inbox by choosing the topics and jurisdictions that most interest you. 

Subscribe to our e-Alerts.