EU executive document says transaction tax plan legal

LONDON Wed Dec 4, 2013 11:57am EST

LONDON Dec 4 (Reuters) - The proposed financial transaction tax in 11 European Union member states does not breach EU or international laws, legal advisors to the bloc's executive said in a document.

A legal opinion for member states in September said a core element of the tax was illegal, threatening to derail the project.

The European Commission's own legal advisors dismissed this view in a 20-page analysis seen by Reuters on Wednesday.

"Based on the above analysis the Commission's services come to the conclusion that... the proposed FTT directive is in conformity both with customary international law and EU primary law," the document says.

The tax on stock, bond and derivatives trades has been proposed as a way of raising money from banks in return for the taxpayer aid they received in the financial crisis.

The document says the proposal does not lead to any "inadmissible" effects in countries outside the 11 taking part.

"What the Council Legal Services perceives as discrimination is in reality nothing but a disparity between different national tax regimes," the document adds.

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