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EU Transaction-Tax Plan Targets Derivatives, Excludes Auctions

The European Commission will soon propose a financial-transaction tax that encompasses all derivatives trades, while exempting bond auctions and dealings with central banks.

The tax rates will need to be high enough to apply consistently across all 27 member states and low enough that trades aren’t driven out of the region, according to a draft commission document obtained by Bloomberg News. A European Union official said today that the plan aims to target a broad range of trades at low rates, so as not to encourage evasion.