France Begins Taxing Financial Transactions
August 2, 2012
By LUIS MIRANDA | THE REAL AGENDA | AUGUST 2, 2012
France has implemented –beginning today — a new financial transactions tax, a levy of 0.2% to be paid by investors whose shares belong to businesses with headquarters in the country.
Transactions in shares of companies whose market value is below EUR 1,000 million (1,230 million) will be exempt.
The application of a tax on financial transactions in Europe has not been possible so far due to the refusal of countries like the United Kingdom. At least nine nations that defend their implementation want to be forerunners in the application of taxes on financial transactions under the “enhanced cooperation” program.
The government of President François Hollande also decided to implement a new tax of 0.01 percent to certain high frequency business transactions, as well as some business with unpaid insurance (CDS) on government borrowings from the European Union (EU).
Unlike what happens in transactions with shares, this tax affects only companies and individuals subject to tax in France. For now, the government will not tax purchases of shares from companies and regular government bonds.
The application of the tax on financial transactions had been adopted under the former conservative government of President Nicolas Sarkozy. His Socialist successor wanted to make it applicable as soon as soon as possible and extend its reach to all financial transactions.