Country Profile: Italy

Financial Transactions Tax (FTT): Yes – tax in place

There are three categories of transactions considered in-scope for the Italian Financial Transaction Tax (IFTT):

1. Shares, participating financial instruments and other instruments representing those issued by Italian-resident companies with an average market capitalization greater than €500mn
2. Derivatives, if more than 50% of their underlying reference value relates to in-scope Italian shares, or is referenced to the value of in-scope Italian shares, including options, warrants, covered warrants and certificates
3. High-Frequency-Trades (HFT), as generated by a computer algorithm that automatically determines the decisions related to the relevant orders or metrics, where the ratio of orders amended or canceled, in a time frame shorter than half a second exceeds 60% of total orders entered.

The rate of tax applied differs depending on the type of transaction, 0.02% on high frequency trades, 0.10% on exchanged traded equities, 0.20% on over-the-counter equities.

There are several exemptions granted for IFTT withholding, including: market-making activities, transactions to ensure the liquidity of newly issued shares, purchases by pension funds and similar entities, transactions between related parties, transactions on qualifying “ethical” or “socially responsible” financial products, transactions with the EU, ECB, Central banks of EU member states or institutions established by international agreements, and executed by Italy, new issuance of shares, including upon conversion of bonds, transfers by way of inheritance or donation, transactions of temporary acquisitions of securities such as repos and securities lending

Italy would switch to an EU FTT if a Directive were to be agreed.

Source: Centre for Economic and Policy Research

Carbon Price: Yes – carbon pricing instrument in place

There are no domestic carbon taxes but Italy participates in the EU ETS