National Approaches towards a Financial Transaction Tax and Their Compatibility with European Law

After the British veto against a European financial transaction tax, the options of European legislation in this area are quite restricted. This paper deals with the question of whether financial transaction taxes as national solo efforts in the eurozone can be introduced in accordance with European law. The article focuses on the fundamental principle of free capital movement (Articles 63 et seq. Treaty on the Functioning of the EU) and the relevant provisions in European Union (EU) secondary law (Capital Duty Directive, General Agreement on Trade in Services). The author comes to the conclusion that national approaches towards a financial transaction tax would be a breach of European law, primary as well as secondary.