In scope instruments
Broad definition of financial instruments , including securities, money-market instruments, units/shares in collective investment undertakings, notes and structured products, derivatives agreements (e.g. options, futures, swaps, forward rate agreements), repurchase agreements.
Taxable event (transaction)
Financial transactions: purchase/sale of financial instruments (including repurchase and reverse repurchase), securities lending, borrowing agreements, intra-group transfer of the right to dispose of a financial instrument as owner, the conclusion/modification of derivatives agreements.
Territorial connection for liability – condition for taxability is:
Residence of issuer?
Location of transaction (e.g. traded on local stock exchange)?
If financial instrument is transferred via an EU regulated market.
Location of party (e.g. at least one party to the transaction is resident)?
At least one party to the transaction is established in the EU and an EU financial institution is party to the transaction (acting either for its own account or for the account of another person), or is acting in the name of a party to a transaction.
Residence of financial intermediary?
Yes, unless exemption
Other relevant conditions for taxability
Primary market transaction (other than the issue and redemption of UCITS units), transactions with: various entities such as the EU, the European Central Bank, the European Investment Bank, etc., certain international organizations, central banks of EU Member States.
Person responsible for collecting/remitting tax
The tax is payable by each financial institution party to the transaction (i.e. acting either for its own account or for the account of another person, in the name of a party to the transaction, or on its account).
Each party to a transaction, including persons other than financial institutions.
Person who in practice bears the tax
Liable persons required to file an FTT return (according to the legislation of the Member State where the tax is due). Financial institutions are required to keep and put at the disposal opf the tax authorities relevant data on financial transactions, for at least five years.
Penalties in case of failure to file/pay
According to the legislation of the Member State where the tax is due.
The taxable amount depends on the type of financial transaction. In case of a financial transaction other than a derivatives transaction, the taxable amount is the value of consideration paid as part of the financial transaction.
0.1% for financial transactions other than those related to derivatives agreements and 0.01% in the case of derivative agreements.