Financial Transaction Tax

(FTT).

A tax to be levied on certain financial transactions.

In 2011, the European Commission proposed a harmonised Financial Transaction Tax for the entire European Union. The objectives of the proposed FTT were to:

• prevent the fragmentation of the Single Market that could result from numerous uncoordinated national approaches to taxing financial transactions
• ensure that the financial sector made a fair and substantial contribution to public finances
• discourage financial transactions which do not contribute to the efficiency of financial markets or of the real economy.

The initiative was also designed to be a first tangible step for taxing such transactions on a global basis.

FTTs are designed to be levied at the financial institution level.

It is possible that a treasury centre that conducts financial transactions could be regarded as a 'financial institution' for FTT purposes. Hence, depending on the transaction, a liability to FTT might arise.

The proposed FTT is sometimes written as Financial Transactions Tax.

See also

• Diverted profits tax
• Robin Hood tax
• Tobin tax
• Germany
• Hypothecation