24 December 2012
Law No. 228
The tax applies to shares and participating financial instruments issued by Italian resident companies, determined on the basis of their legal seat. However, the tax applies to securities representing the shares and participating financial instruments irrespective of the residence of the relevant issuer.
In the case of listed shares, the tax applies to companies with a market capitalization in November of the previous year of more than EUR 500 million.
In cases 1 and 2 the FTT is not payable by either party, while in cases 3, 4 and 5 the exemption is granted only to person carrying on the mentioned activity.
The FTT must be paid by banks, investment companies, notaries and other intermediaries directly involved in the transaction. If multiple intermediaries are involved in the same transaction, the FTT must be paid by the intermediary that receives the execution order from the purchaser or the final counterparty.
Same as the persons responsible for collecting/remitting tax.
However, according to article 19(4) of the Ministerial Decree, non-residents involved in a financial transaction are deemed to be the purchaser or the final counterparty of the execution order if established in a state which does not fulfill the exchange of information requirements, i.e. a State not included in the list provided by the Directorial Decree No. 2013/26948, released on 1 March 2013 by the Italian tax authorities.
The tax is paid by the intermediary by the 16th day of the month following
The provisions relating to VAT apply, as they are compatible.
In case of delayed, insufficient or omitted payment of the tax, penalties apply exclusively to the persons having to comply with such obligation and also liable for the payment of the tax. These persons may suspend the execution of the transaction until they get funding for the payment of the tax. In case of insufficient or omitted payment of the tax, the tax administration has the authority to recover the tax together with interest from the taxpayer concerned.
For the sale of shares and other equity securities, the FTT applies on the value of the transaction, i.e. the net daily balance of transactions on the same financial instrument executed by the same subject, or the consideration paid for each trade.
For transactions involving derivative contracts, taxation is fixed and determined by the type of derivative and its notional value.
Standard FTT rates:
Rates for derivatives. The FTT applies at varying fixed amounts depending on the type of derivative and its notional value:
Rates for high frequency trading: a separate 0.02 percent tax is imposed on this kind of transaction.