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  • Service: Tax
  • Type: Business and industry issue
  • Date: 8/26/2013

Chapter III: Chargeability, taxable amount and rates of the common FTT 

European Commission proposal for a Council Directive implementing enhanced cooperation in the area of financial transaction tax. COM(2013) 71 final. Issued Brussels, 14.2.2013.

Article 5: Chargeability of FTT

  1. The FTT shall become chargeable for each financial transaction at the moment it occurs.
  2. Subsequent cancellation or rectification of a financial transaction shall have no effect on chargeability, except for cases of errors.

Article 6: Taxable amount of the FTT in the case of financial transactions other than those related to derivatives contracts

  1. In the case of financial transactions other than those referred to in point 2(c) of Article 2(1) and, in respect of derivative contracts, in points 2(a), 2(b) and 2(d) of Article 2(1), the taxable amount shall be everything which constitutes consideration paid or owed, in return for the transfer, from the counterparty or a third party.
  2. Notwithstanding paragraph 1, in the cases referred to in that paragraph the taxable amount shall be the market price determined at the time the FTT becomes chargeable:
      (a) where the consideration is lower than the market price;
    (b) in the cases referred to in point 2(b) of Article 2(1).
  3. For the purposes of paragraph 2, the market price shall be the full amount that would have been paid as consideration for the financial instrument concerned in a transaction at arm's length.

Article 7: Taxable amount in the case of financial transactions related to derivatives contracts

In the case of financial transactions referred to in point 2(c) of Article 2(1) and, in respect of derivative contracts, in points 2(a), 2(b) and 2(d) of Article 2(1), the taxable amount of the FTT shall be the notional amount referred to in the derivatives contract at the time of the financial transaction.


Where more than one notional amount is identified, the highest amount shall be used for the purpose of determining the taxable amount.

Article 8: Common provisions on taxable amount

For the purposes of Articles 6 and 7, where the value relevant for the determination of the taxable amount is expressed, in whole or in part, in a currency other than that of the taxing participating Member State, the applicable exchange rate shall be the latest selling rate recorded, at the time the FTT becomes chargeable, on the most representative exchange market of the participating Member State concerned, or at an exchange rate determined by reference to that market, in accordance with the rules laid down by that Member State.

Article 9: Application, structure and level of rates

  1. The participating Member States shall apply the rates of FTT in force at the time when the tax becomes chargeable.
  2. The rates shall be fixed by each participating Member State as a percentage of the taxable amount.
    Those rates shall not be lower than:
      (a) 0.1% in respect of the financial transactions referred to in Article 6;
    (b) 0.01% in respect of financial transactions referred to in Article 7.
  3. The participating Member States shall apply the same rate to all financial transactions that fall under the same category pursuant to points (a) and (b) of paragraph 2.

Source: adapted from the original documents (PDF 186 KB) © European Union, 1995-2013. Responsibility for the adaptation lies entirely with KPMG International.

 

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An overview of nine EU Member States understood to be currently applying a national form of FTT and of the EU proposal for an eleven Member State FTT.

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