House Legislation Would Prohibit Foreign Governments from Imposing Financial Transactions Tax on US Securities and Derivatives Transactions

Rep. Tom Price (R-GA) has introduced legislation that would prohibit foreign governments from imposing a financial transactions tax on US financial markets and US securities transactions. Specifically, HR 6616 would prohibit the Treasury Secretary from assisting any foreign government with regard to the collection of a tax on securities transactions occurring on a US financial exchange or over-the-counter.  Moreover, the legislation would protect securities transactions in the US from enforcement of any excise taxes imposed by the government of France.

The proposed legislation comes against the backdrop of a strong movement in the European Union to legislate a financial transactions tax. The legislation clarifies that foreign governments have neither the ability nor the right to tax private securities and derivatives transactions within the US. The securities industry, which supports the legislation, specifically praised Rep. Price for addressing the inappropriate cross-border application of the French financial transactions tax on US investors.