Italy Introduces a Financial Transaction Tax as of 2013

December 26, 2012

With Budget Law 2013, Italy introduced a financial transaction tax (“FTT”) that will apply to (i) trades entailing the transfer of title of (x) shares or equity-like financial instruments issued by companies resident in Italy; and (y) securities representing shares and financial instruments under (x), regardless of the residence of the issuer (such shares, financial instruments and securities, altogether the “Securities”); (ii) derivatives, such as swaps, futures, options, cash notional forward agreements and credit default swaps, having as a main underlying, or the value of which is mainly linked to, a Security (including warrants, covered warrants and certificates), regardless of whether they are physically or cash-settled (the “Derivatives”), and (iii) high-frequency trading occurring on the Italian financial markets and relating to Securities and Derivatives, as generated by a computer algorithm that automatically determines the decisions related to the relevant orders or metrics, their amendment or cancellation (the “High-Frequency Trading”).

The FTT will apply to transactions executed (i) as of March 1, 2013, with respect to trades on Securities and High-Frequency Trading on Securities, and (ii) as of July 1, 2013, with respect to Derivatives and High-Frequency Trading on Derivatives and it will be levied by the intervening financial intermediary, even if non-resident, or by the parties at the following rates: (x) 0.22% on OTC Securities trades and 0.12 on Securities trades on Regulated Markets (reduced to 0.2% and 0.1%, respectively, as of 2014), (y) fixed rates on Derivatives (up to Euro 200), and (z) 0.2% on High-Frequency Trading transactions.

A number of exemptions are contemplated, such as market making activities, trades on shares negotiated on Regulated Markets of certain issuers, liquidity support transactions.

Certain features of the FTT regime will be established with Ministerial Decree to be issued within 30 days of the entry in force of the Budget Law.

Should you have any questions with respect to the new Italian FTT, please not do hesitate to contact Vania Petrella (tel.: + 39 06 695 22 204; e-mail: or Gianluca Russo (tel.: + 39 06 695 22 680; e-mail: in the Rome office or any of your regular contacts in the Tax, Capital Markets or other practice groups at the firm.