The Impact of Financial Transaction Tax on Companies - A Discussion

In February 2013, eleven Member States agreed to adopt the Commissions' Proposal for a Council Directive implementing enhanced cooperation in the area of financial transaction tax, COM (2013)71 final. This article reviews three thematic areas frequently discussed by practitioners and academia alike on the impact that the Proposal could have on companies operating within participating Member States. This includes the impact on capital and related costs, business strategy and compliance considerations. I ask the question whether the unintentional repercussions could be mitigated by making adjustments to the current Proposal including the expansion of exemptions and the adoption of an implementation framework that takes inspiration from the Value Added Tax System that is already implemented across Member States. (author's abstract)Series: WU International Taxation Research Paper Serie

Financial Transaction Tax and Investment Funds: An Analysis of Key Factors and Their Impact on Performance

Using retrospective data analysis, this paper looks at the potential effects that the EU financial transaction tax would have on registered Austrian funds. We use original data for 927 investment funds over a 12-month trading period covering the 2014 calendar year. We analyse its effect on total net assets and on performance. We find that the cost of FTT on Austrian funds for 2014 would be Euro 89.5 million. The effect of FTT differs between funds and is influenced by fund category, gilt-edged securities held, risk and investment strategy. Behavioural changes in the market would likely arise in these areas if FTT were to be introduced. (authors' abstract)Series: WU International Taxation Research Paper Serie