The European Parliament approved a report which ask to apply the financial transaction tax even if only some Member States opt for it. MEPs also ask to design better this tax in order to capture more traders and make evasion unprofitable.

A report on financial transaction tax has been approved in plenary session by MEPs underlying the need to do a better designed tax to capture more traders and make evasion unprofitable. The adopted text adds to the Commission proposal adopted in 2011 an "issuance principle", whereby financial institutions located outside the EU would also be obliged to pay the FTT if they traded securities originally issued within the EU. The European Parliament has been calling for a financial transaction tax (FTT), for close to two years, so as for example shows the resolution approved in March 2011.

On the other hand, MEPs want to keep the "residence principle", which would mean that shares issued outside of the EU but subsequently traded by at least one institution established within the EU would be caught. In addition to this, the most substantive exemption was that granted to pension funds, which would see the tax waived on their transactions.

The report also highlights that the stakes to make evading the FTT potentially far more expensive than paying it. Taking the UK stamp duty approach, the text links payment of the FTT to the acquisition of legal ownership rights. This means that if the buyer of a security did not pay the FTT, he or she would not be legally certain of owning that security. As FTT rates would be low, this risk is expected to far outweigh any potential financial gain from evasion.