Financial transaction tax

A financial transaction tax is a levy on a specific type of financial transaction for a particular purpose. The concept has been most commonly associated with the financial sector; it is not usually considered to include consumption taxes paid by consumers.. A transaction tax is not a levy on financial institutions per se; rather, it is charged only on .

The current transaction tax is levied per transaction at a rate of not less than 0.

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A financial transaction tax is a levy on a specific type of financial transaction for a particular purpose. The concept has been most commonly associated with the financial sector; it is not usually considered to include consumption taxes paid by consumers.. A transaction tax is not a levy on financial institutions per se; rather, it is charged only on .

Singapore charges a 0. Stamp duty is not levied on derivative instruments. In January , Sweden introduced a 0. In July , the rate was doubled, and in January , a considerably lower tax of 0.

On a bond with a maturity of five years or more, the tax was 0. Wrobel prepared a paper for the Canadian Government in June , examining the international experience with financial transaction taxes, and paying particular attention to the Swedish experience. The revenues from taxes were disappointing; for example, revenues from the tax on fixed-income securities were initially expected to amount to 1, million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million.

On the day that the tax was announced, share prices fell by 2. But there was leakage of information prior to the announcement, which might explain the 5. These declines were in line with the capitalized value of future tax payments resulting from expected trades.

It was further felt that the taxes on fixed-income securities only served to increase the cost of government borrowing, providing another argument against the tax. Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. On 15 April , the tax on fixed-income securities was abolished.

In January the rates on the remaining taxes were cut in half and by the end of the year they were abolished completely. Once the taxes were eliminated, trading volumes returned and grew substantially in the s. The Swedish FTT is widely considered a failure by design since traders could easily avoid the tax by using foreign broker services.

In Switzerland a transfer tax Umsatzabgabe is levied on the transfer of domestic or foreign securities such as bonds and shares, where one of the parties or intermediaries is a Swiss security broker. Other securities such as options futures, etc. Swiss brokers include banks and bank-linked financial institutions. The duty is levied at a rate of 0.

However, there are numerous exemptions to the Swiss transfer tax. These are among others: Eurobonds, other bonds denominated in a foreign currency and the trading stock of professional security brokers. The revenue of the Swiss transfer tax was CHF 1. In Taiwan the securities transaction tax STT is imposed upon gross sales price of securities transferred and at a rate of 0. The Taiwanese government argued this "would enliven the bond market and enhance the international competitiveness of Taiwan's enterprises.

Since , Taiwan also levies a stock index futures transaction tax imposed on both parties. The current transaction tax is levied per transaction at a rate of not less than 0.

The major part of this revenue came from the taxation of bonds and stocks The taxation of stock index future shares was 3. In total, this corresponds to 0. A stamp duty was introduced in the United Kingdom as an ad valorem tax on share purchases in Securities issued by companies overseas are not taxed.

This means that—just like the standard stamp duty—the tax is paid by foreign and UK-based investors who invest in UK incorporated companies. In other words, the tax applies to all companies which are headquartered in the UK, [44] albeit there is a relief for intermediaries such as market makers and large banks that are members of a qualifying exchange as a condition of their obligation to provide liquidity.

Only a minor part comes from Stamp Duty. In terms of GDP and total tax revenue the highest values were reached during the dot. This accounts for 0. The US imposed a financial transaction tax from to that was originally 0. In a "pro—Tobin tax" NGO proposed that a tax could be used to fund international development: Stephen Spratt, "the revenues raised could be used for At the UN World Conference against Racism , when the issue of compensation for colonialism and slavery arose in the agenda, President Fidel Castro of Cuba advocated the Tobin Tax to address that issue.

According to Cliff Kincaid, Castro advocated it "specifically in order to generate U. Castro cited holocaust reparations as a previously established precedent for the concept of reparations.

May the tax suggested by Nobel Prize Laureate James Tobin be imposed in a reasonable and effective way on the current speculative operations accounting for trillions of US dollars every 24 hours, then the United Nations, which cannot go on depending on meager, inadequate, and belated donations and charities, will have one trillion US dollars annually to save and develop the world.

Given the seriousness and urgency of the existing problems, which have become a real hazard for the very survival of our species on the planet, that is what would actually be needed before it is too late. On 15 February a coalition of 50 charities and civil society organisations launched a campaign for a Robin Hood tax on global financial transactions. The proposal would affect a wide range of asset classes including the purchase and sale of stocks, bonds, commodities, unit trusts, mutual funds, and derivatives such as futures and options.

The main differences between the proposals has been the size of the tax, which financial transactions are taxed and how the new tax revenue is spent. The bills have proposed a. Harkin D-Iowa have received a number of cosponsors in the Senate and House.

The tax on futures contracts to buy or sell a specified commodity of standardized quality at a certain date in the future, at a market determined price would be 0. Swaps between two firms and credit default swaps would be taxed 0. The tax would only impact financial transactions between financial institutions charging 0.

If implemented the tax must be paid in the European country where the financial operator is established. This "R plus I" residence plus issuance solution means the EU-FTT would cover all transactions that involve a single European firm, no matter if these transactions are carried out in the EU or elsewhere in the world.

According to John Dizard of the Financial Times , the unilateral extension of extraterritorial power can only cause problems: From a US perspective, this unilateral extension of extraterritorial power by the commission goes beyond anything attempted since the US and Great Britain concluded the Treaty of Paris ending the Revolutionary War in Most institutions that try to do something like that have their own navy, and usually a larger one than the sovereign territory where they are attempting to impose the tax.

Being faced with stiff resistance from some non-eurozone EU countries, particularly United Kingdom and Sweden, a group of eleven states began pursuing the idea of utilizing enhanced co-operation to implement the tax in states which wish to participate. The proposal supported by the eleven EU member states , was approved in the European Parliament in December , [89] and by the Council of the European Union in January Proponents of the tax assert that it will reduce price volatility.

In a paper, Lawrence Summers and Victoria Summers argued, "Such a tax would have the beneficial effects of curbing instability introduced by speculation, reducing the diversion of resources into the financial sector of the economy, and lengthening the horizons of corporate managers.

The French study concluded that these volatility measures "are likely to underestimate the destabilizing role of security transactions since they — unlike large ticks — also reduce the stabilizing liquidity supply". A study of the UK Stamp Duty, which exempts market makers and large banks that are members of a qualifying exchange, found no significant effect on the volatility of UK equity prices.

In the IMF published a study paper, which argues that a securities transaction tax STT "reduces trading volume, it may decrease liquidity or, equivalently, may increase the price impact of trades, which will tend to heighten price volatility".

Regarding proposals to abolish the UK's Stamp Duty, Oxera concluded that the abolition would "be likely to result in a non-negligible increase in liquidity, further reducing the cost of capital of UK listed companies". The natural effect of the FTT's reduction of trading volume is to reduce liquidity, which "can in turn slow price discovery, the process by which financial markets incorporate the effect of new information into asset prices".

The FTT would cause information to be incorporated more slowly into trades, creating "a greater autocorrelation of returns". This pattern could impede the ability of the market to prevent asset bubbles.

The deterrence of transactions could "slow the upswing of the asset cycle", but it could also "slow a correction of prices toward their fundamental values". Habermeier and Kirilenko conclude that "The presence of even very small transaction costs makes continuous rebalancing infinitely expensive. Therefore, valuable information can be held back from being incorporated into prices. As a result, prices can deviate from their full information values. In these cases, the capital market becomes less efficient.

Revenues vary according to tax rate, transactions covered, and tax effects on transactions. The Swedish experience with transaction taxes in —91 demonstrates that the net effect on tax revenues can be difficult to estimate and can even be negative due to reduced trading volumes.

Revenues from the transaction tax on fixed-income securities were initially expected to amount to 1, million Swedish kronor per year but actually amounted to no more than 80 million Swedish kronor in any year.

Reduced trading volumes also caused a reduction in capital gains tax revenue which entirely offset the transaction tax revenues. An examination of the scale and nature of the various payments and derivatives transactions and the likely elasticity of response led Honohan and Yoder to conclude that attempts to raise a significant percentage of gross domestic product in revenue from a broad-based financial transactions tax are likely to fail both by raising much less revenue than expected and by generating far-reaching changes in economic behavior.

They point out that, although the side effects would include a sizable restructuring of financial sector activity, this would not occur in ways corrective of the particular forms of financial overtrading that were most conspicuous in contributing to the ongoing financial crisis. Accordingly, such taxes likely deliver both less revenue and less efficiency benefits than have sometimes been claimed by some. On the other hand, they observe that such taxes may be less damaging than feared by others.

On the other hand, the case of UK stamp duty reserve tax shows that provided exemptions are given to market makers and banks, that FTT can generate modest revenues, at the expense of pensioners and savers. Despite the low tax rate of 0. If implemented on an international scale, revenues may be even considerably higher, since it would make it more difficult for traders to avoid the tax by moving to other locations.

According to a European Commission working paper, empirical studies show that the UK stamp duty influences the share prices negatively. More frequently traded shares are stronger affected than low-turnover shares. Therefore, the tax revenue capitalizes at least to some extent in lower current share prices. For firms which rely on equity as marginal source of finance this may increase capital costs since the issue price of new shares would be lower than without the tax.

With a lower capital stock, output would trend downward, reducing government revenues and substantially offsetting the direct gain from the tax. In the long run, wages would fall, and ordinary workers would end up bearing a significant share of the cost.

More broadly, FTTs violate the general public-finance principle that it is inefficient to tax intermediate factors of production, particularly ones that are highly mobile and fluid in their response. An IMF Working Paper finds that the FTT "disproportionately burdens" the financial sector and will also impact pension funds, public corporations, international commerce firms, and the public sector, with "multiple layers of tax" creating a "cascading effect". Other studies have suggested that the financial transaction tax is regressive in application—particularly the Stamp Duty in the UK, which includes certain exemptions only available to institutional investors.

One UK study, by the Institute for Development Studies, suggests, "In the long run, a significant proportion of the tax could end up being passed on to consumers. The study concluded, therefore, "The tax is thus likely to fall most heavily on long-term, risk-averse investors.

Although James Tobin had said his own Tobin tax idea was unfeasible in practice, a study on its feasibility commissioned by the German government concluded that the tax was feasible even at a limited scale within the European time zone without significant tax evasion. Stiglitz said, the tax is "much more feasible today" than a few decades ago, when Tobin recanted.

In January , feasibility of the tax was supported and clarified by researchers Rodney Schmidt, Stephan Schulmeister and Bruno Jetin who noted "it is technically easy to collect a financial tax from exchanges First dealers agree to a trade; then the dealers' banks match the two sides of the trade through an electronic central clearing system; and finally, the two individual financial instruments are transferred simultaneously to a central settlement system.

Thus a tax can be collected at the few places where all trades are ultimately cleared or settled. When presented with the problem of speculators shifting operations to offshore tax havens , a representative of a "pro—Tobin tax" NGO argued as follows:. Agreement between nations could help avoid the relocation threat, particularly if the tax were charged at the site where dealers or banks are physically located or at the sites where payments are settled or 'netted'.

The relocation of Chase Manhattan Bank to an offshore site would be expensive, risky and highly unlikely — particularly to avoid a small tax. Globally, the move towards a centralized trading system means transactions are being tracked by fewer and fewer institutions.

Hiding trades is becoming increasingly difficult. Transfers to tax havens like the Cayman Islands could be penalized at double the agreed rate or more. Citizens of participating countries would also be taxed regardless of where the transaction was carried out. There has been debate as to whether one single nation could unilaterally implement a financial transaction tax.

In the year , "eighty per cent of foreign-exchange trading [took] place in just seven cities. Agreement [to implement the tax] by [just three cities,] London, New York and Tokyo alone, would capture 58 per cent of speculative trading.

Over 1, economists including Nobel laureate Paul Krugman , [] Jeffrey Sachs [] and Nobel laureate Joseph Stiglitz [37] , more than 1, parliamentarians from over 30 countries, [] [] the world's major labor leaders, the Association for the Taxation of Financial Transactions and for Citizens' Action , Occupy Wall Street protesters, Oxfam , War on Want [] and other major development groups, the World Wildlife Fund , Greenpeace [] and other major environmental organizations support a FTT.

However, the reality is that a commission of the Vatican of which the Pope is not a member merely said that such a tax would be worth reflecting on. In their opinion FTT would constitute, among other things, a fair political initiative in the current financial crisis and it would represent an EU added value.

Most hedge funds managers fiercely oppose FTT. In , the IMF conducted considerable research that opposes a transaction tax. This is an interesting issue. We will look at it from various angles and consider all proposals. Challenging the IMF's belittling of the financial transaction tax, Stephan Schulmeister of the Austrian Institute of Economic Research found that, "the assertion of the IMF paper, that a financial transaction tax 'is not focused on the core sources of financial instability', does not seem to have a solid foundation in the empirical evidence.

The report indicated that "there is a widely held perception that IMF research is message driven. About half of the authorities held this view, and more than half of the staff indicated that they felt pressure to align their conclusions with IMF policies and positions. A survey published by YouGov suggests that more than four out of five people in the UK, France, Germany, Spain and Italy think the financial sector has a responsibility to help repair the damage caused by the economic crisis.

It found that Europeans "strongly support the various measures that the European Union could adopt to reform the global financial markets A quarter of Europeans are against it, possibly because of the fear that they themselves might be subject to this tax. From Wikipedia, the free encyclopedia.

Taxation An aspect of fiscal policy Policies. Desai Dhammika Dharmapala James R. Automated payment transaction tax. Swedish financial transaction tax. Stamp duty in the United Kingdom. European Union financial transaction tax. Reaction to the Tobin Tax. This section needs to be updated. Please update this article to reflect recent events or newly available information. Archived from the original on 31 October Retrieved 24 June Stamp Out Poverty report.

Stamp Out Poverty Campaign. Page, "Foolish Revenge or Shrewd Regulation? Institute for Global Dialotue. Journal of Financial Services Research. Proposing a new tax system for the 21st century". The Automated Payment Transaction Tax". The Milken Institute Review: A Journal of Economic Policy. Feige Taxation for the 21st Century: Survey and Options" PDF. Jubilee Research, a successor to Jubilee UK.

Archived from the original on 6 March Retrieved 11 February Diese Bewegung will die Einführung einer Steuer auf Devisengeschäfte.

Damit sollen die Kapitalmärkte gebändigt und mit den zusätzlichen Einnahmen die Entwicklungshilfe verstärkt werden. Klingt das nicht wie Ihr Vorschlag? Ich hatte vorgeschlagen, die Einnahmen der Weltbank zur Verfügung zu stellen. Aber darum ging es mir gar nicht. Die Devisenumsatzsteuer war dafür gedacht, Wechselkursschwankungen einzudämmen. Die Idee ist ganz simpel: Bei jedem Umtausch von einer Währung in die andere würde eine kleine Steuer fällig, sagen wir von einem halben Prozent des Umsatzes.

So schreckt man Spekulanten ab. Denn viele Investoren legen ihr Geld sehr kurzfristig in Währungen an. Wird dieses Geld plötzlich zurückgezogen, müssen die Länder die Zinsen drastisch anheben, damit die Währung attraktiv bleibt. Hohe Zinsen aber sind oft desaströs für die heimische Wirtschaft, wie die Krisen in Mexiko, Südostasien und Russland während der neunziger Jahre gezeigt haben. Meine Steuer würde Notenbanken kleiner Länder Handlungsspielraum zurückgeben und dem Diktat der Finanzmärkte etwas entgegensetzen.

English Summaries [of quotes in Spiegel Online]. Retrieved 25 June Retrieved 17 March Open Societies, Sovereignty, and International Terrorism". Archived from the original on 14 April Retrieved 29 November A modern tax technology;the Brazilian experience with a bank transactions tax — ". Research Papers in Economics.

Retrieved 28 June Archived from the original PDF on 12 January The International Experience and the Lessons for Canada. Journal of Financial Economics. HM Revenue and Customs. Archived from the original on 6 December Retrieved 17 December They include reducing extreme poverty , reducing child mortality rates, fighting disease epidemics such as AIDS, and developing a global partnership for development. Fidel Castro Ruz, President of the Republic of Cuba at the World Conference against racism, racial discrimination, xenophobia and related intolerance".

Retrieved 29 January Retrieved 24 October Archived from the original on 14 December Retrieved 13 February A way to invest in our future Rep. Pete Stark " , H. To amend the Internal Revenue Code of to impose a tax on certain trading transactions , "Summary: Comprehensive Dental Reform Act of , "H.

Inclusive Prosperity Act" ; Senate bills: The Oregonian , OregonLive. Retrieved 26 February Retrieved 3 March Institutionalisiert wird der Devisenmarkt durch den Devisenhandel. Darunter wird im engeren Sinne der Interbankenmarkt im Rahmen des Kundengeschäfts und Eigenhandels verstanden.

Hier handeln international tätige Kreditinstitute in Form standardisierter Devisengeschäfte auf der Grundlage anerkannter Handelsusancen mit dem Handelsobjekt Devisen. Devisengeschäfte wiederum bestehen aus den Grundformen Devisenkassa- oder Devisentermingeschäft sowie den daraus abgeleiteten Derivate Devisenswapgeschäften und Devisenoptionsgeschäften.

Von Devisen kassageschäften auch Spotgeschäften wird gesprochen, wenn zwischen dem Tag des Geschäftsabschlusses und dem Tag der Erfüllung der beiderseitigen Ansprüche ein Zeitraum von maximal zwei Bankarbeitstagen liegt. Am Tag der Erfüllung liefert der Verkäufer die verkauften Devisen auf das vereinbarte Konto, während der Käufer der Devisen den vereinbarten Gegenwert zu leisten hat. Es handelt sich mithin um einen reinen Währungstausch.

Bei Devisentermingeschäften auch Forward , Sologeschäft oder Outrightgeschäft genannt liegt zwischen dem Tag des Geschäftsabschlusses und dem Erfüllungstag ein Zeitraum von mindestens 3 Arbeitstagen oder 1, 2, 3, 6, 12 oder mehr Monate, wobei beide Vertragsparteien die am Tag des Geschäftsabschlusses vereinbarten Bedingungen insbesondere Devisenkurs unabhängig davon zu erfüllen haben, ob sich die aktuelle Kurssituation verändert hat.

Aus diesem Grunde gehört das Devisentermingeschäft zu den Kurssicherungs- oder Hedgegeschäften. Bei einem Devisenswapgeschäft auch kurz Swap , vom eng.

Dabei wird gleichzeitig der Tausch zweier Währungen zum Tag des Geschäftsabschlusses und der Rücktausch zu einem späteren Zeitpunkt vereinbart. Wegen der Kombination mit einem Termingeschäft ist auch das Swapgeschäft ein Kurssicherungsgeschäft. Eine Devisenoption ist eine Vereinbarung, die dem Optionskäufer das Recht einräumt, eine Währung zu einem bestimmten Kurs und zu einem bestimmten Zeitpunkt oder innerhalb eines Zeitraumes zu beziehen oder zu liefern.

Der Verkäufer der Option übernimmt dafür die Verpflichtung, die Währung zu liefern oder entgegenzunehmen. Das Angebot stellen die Nettoauslandsinvestitionen dar, also das Angebot an Devisennachfrage.

Sie sind unabhängig vom realen Wechselkurs nur abhängig vom Realzins auf dem Kreditmarkt. Die Nachfrage kommt durch die Nettoexporte zustande, also die Nachfrage nach Devisenangebot. Devisenmarkt und Kreditmarkt hängen u. Der Handel verläuft nicht zentral über eine Börse, sondern meist direkt zwischen Finanzinstituten über entsprechende Händlernetze.

Zunehmend sind unter den Teilnehmern auch Konzerne , Broker und private Spekulanten. Wie bei jedem Rechtsgeschäft besteht auch das Devisenhandelsgeschäft aus Leistung und Gegenleistung , z.

Wechselkurse werden dazu meist in sogenannten Währungspaaren angegeben — diese Notation nennt man auch Preisnotierung. Die Ausgangswährung wird dabei Basiswährung von englisch base currency und die Zielwährung wird Quotierungswährung von englisch quote currency genannt.

Neben dem reinen Umtauschverhältnis werden noch die ISO -Codes der beiden Währungen genannt, entweder ohne Trennsymbol oder mit Schrägstrich oder einem Punkt getrennt. Der Wechselkurs wird meist mit fünf signifikanten Stellen angegeben:. Preisänderungen werden in Pips angegeben und die Einheit der Handelsmenge ist das Lot. Der Devisenhandel zwischen den Banken findet in der Praxis inzwischen fast nur noch auf elektronischem Wege statt.

Dabei werden innerhalb von Sekunden oft hohe Beträge zwischen den Banken gehandelt. Ein häufiges Devisengeschäft im Privatkundengeschäft ist die Auslandsüberweisung in ein Land mit Fremdwährung. Dies kann mit Hilfe von Konten bei einer Bank vor Ort im Fremdwährungsland abgewickelt werden, über die dann die Verbindlichkeiten auch gezahlt werden.

Bei Wertpapieren , die in Fremdwährungen gehandelt werden, die Ertragsausschüttungen in Fremdwährung erzielen oder die in Fremdwährung zurückgezahlt werden z. Fremdwährungsanleihe , führt die Bank entsprechende Devisenwechsel automatisch durch. Das Gleiche gilt bei Fremdwährungs schecks.

Zertifikate können je nach Konstruktion an die Entwicklung von Wechselkursen gekoppelt sein. Devisentauschgeschäfte sind darüber hinaus ein Betätigungsfeld von spekulativen Privatanlegern.

Fremdwährungskonten bei deutschen Kreditinstituten sind von der gesetzlichen Einlagensicherung ausgenommen, soweit sie sich auf Währungen von Nicht-EU-Staaten beziehen.

Spekulation gegen den Devisenmarkt ist nach der Markteffizienzhypothese ein reines Risikogeschäft und als Nullsummenspiel [11] mit Gebühren darüber hinaus ein Verlustgeschäft: Über die Hälfte der Devisenhandelskonten erzielen Verluste. Dieses Risiko vervielfältigt sich, wenn dabei mit einem Hebel gehandelt wird, um geringe Wechselkursschwankungen zu verstärken.

Das durchschnittliche Betrugsopfer verliert dabei etwa Die folgende Tabelle zeigt die 20 am häufigsten gehandelten Währungen und deren prozentualen Anteil am durchschnittlichen täglichen Umsatz seit jeweils April.

Die folgende Tabelle zeigt die 20 am meisten gehandelten Wechselkursrelationen seit jeweils April. Eine globale Aufsicht über die Devisenmärkte gibt es nicht. Beaufsichtigt werden auf nationaler Ebene allenfalls einige Marktteilnehmer. Soweit nämlich die Marktteilnehmer als Kreditinstitute gelten, unterliegen sie der Bankenaufsicht ihres Landes.