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A financial transactions tax to be adopted by 11 EU states will raise 30-35 billion euros each year but controversially, the levy will also be applicable world-wide, the European Commission said Thursday.
The Financial Transaction Tax (FTT) imposes tax of 0.1 percent on a trade in shares and bonds, and of 0.01 percent for derivative instruments.
The estimated total is equivalent to $40-$46.6 billion.
Under the latest proposals, the Commission said that if any of these investments originate in one of the 11 FTT states, then they can be taxed wherever they are traded, giving them a global reach that could cause uproar.
After strong opposition to the tax led by Britain, home to one of the world's biggest financial markets in London, EU finance ministers last month cleared the 11 states to launch the tax, seen as a way of clawing back some of the money spent in propping up the banking sector during the debt crisis.
France and Germany had pushed for going ahead with the tax under the EU's Enhanced Cooperation procedure and they were joined by Austria, Belgium, Estonia, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.
EU Tax Commissioner Algirdas Semeta said the FTT "is an unquestionably fair and technically sound tax, which will strengthen our Single Market and temper irresponsible trading.
"I now call on (the 11 states) to push ahead with ambition -- to drive, decide and deliver on the world's first regional FTT," Semeta said in a statement on the new proposals that will go the European Parliament and EU leaders for final approval.
Semeta said the FTT has three main objectives, firstly strengthening the EU Single Market by "reducing the number of divergent national approaches to financial transaction taxation.
"Secondly, it will ensure that the financial sector makes a fair and substantial contribution to public revenues.
" Finally, the FTT will support regulatory measures in encouraging the financial sector to engage in more responsible activities, geared towards the real economy," he said, highlighting the political drive behind the proposal to make the financial sector pay for some of the damage caused during the debt crisis.
The statement significantly went on to say that the FTT will continue to be based on a "residence principle" which could have far-reaching implications
"This means that the tax will be due if any party to the transaction is established in a participating Member State, regardless of where the transaction takes place," it said.
"This is the case both if a financial institution engaged in the transaction is, itself, established in the FTT-zone, or if it is acting on behalf of a party established in that jurisdiction."
The "residence principle" is expressly aimed "to safeguard against the relocation of financial transactions," according to background notes provided.
"If a financial institution involved in the transaction is involved in the FTT-zone, or is acting on behalf of a party established in this zone, then the transaction will be taxed, regardless of where it takes place in the world," the notes added.
The tax will also incorporate an "issuance principle" as a further safeguard against avoidance of the tax, Semeta's statement said.
"This means that financial instruments issued in the 11 Member States will be taxed when traded, even if those trading them are not established within the FTT-zone." it said.
An EU FTT, often dubbed the 'Robin Hood Tax,' was put up in September 2011 but Britain and many other states opposed it.
France and Germany then pressed for those states who favoured the tax to be allowed to proceed and the EU's Enhanced Cooperation procedure allowed them to do so as long as no other members objected to the more limited application of the FTT.