The Italian Tax Authority, on October 26, added Switzerland to its white list of countries for purposes of the financial transactions tax (imposta sulle transazioni finanziarie or Tobin tax).
Protocol No. 178754 updates the white list, which is a list of countries with which Italy has an agreement in force for exchange of information and assistance in the collection of tax credits for financial transactions tax purposes. Its purpose is to identify entities subject to the payment of the Italian financial transaction tax imposed where more than one financial intermediary is involved in a transaction concerning Italian securities.
According to the update, Switzerland is no longer considered an uncooperative country due to the entry into force of an amending protocol to the Italy-Switzerland Income and Capital Tax Treaty.
Therefore, intermediaries resident in Switzerland will no longer be treated as the final investor or purchaser. This means that a Swiss intermediary transacting with such a party in a chain of intermediaries will not be responsible for payment of the Italian financial transactions tax.
The financial transaction tax applies to certain financial transactions concerning Italian securities wherever executed and regardless of the nationality of the parties and regardless of where the transfer takes place.
The following transactions are subject to the tax:
- Transfers of shares or participating financial instruments issued by companies that have their registered office in Italy.
- Transactions involving derivatives whose value is linked to that of such underlying shares/participating instruments.
- Transactions involving high-frequency trading.
Protocol No. 178754 will take effect with effect from 13 July.
Davide Anghileri
Davide Anghileri is a PhD candidate at the University of Lausanne, where he is writing his thesis on the attribution of profits to PEs. He researches transfer pricing issues and lectures for the Master of Advanced Studies in International Taxation and Executive Program on Transfer Pricing.
Anghileri, a Contributing Editor at MNE Tax, previously worked as a policy advisor to the Swiss government on BEPS issues.
Davide can be reached at [email protected].
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Interesting developments in Europe. I have been following transaction taxes for ten years — originally with Dr. Edgar Feige and then my own concept distilled from my experience debating and discussing his version. Would appreciate your review of this new website I authored http://www.autodeposittax.com. I specifically found involving the market transactions was fraught with opposition and, frankly, I believe would seriously change the financial market itself. So my version avoids doing so.