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Sovereign and pension funds exempt from Italy's Tobin tax

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  • insubria87
    Sovereign and pension funds exempt from Italy s Tobin tax FTT to go into effect October 16 26 August, 18:52 Guarda la foto1 di 1 (ANSA) - Rome, August 26 -
    Message 1 of 1 , Aug 26 10:12 AM
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      Sovereign and pension funds exempt from Italy's Tobin tax

      FTT to go into effect October 16

      26 August, 18:52
      (ANSA) - Rome, August 26 - Financial transactions involving sovereign funds, such as treasury bonds, won't be subject to the new Financial Transaction Tax (FTT) - the so-called Tobin tax - which goes into effect on October 16, the Italian economy ministry announced on Monday.

      ''Entities and organizations invested in by pension funds'' will also be exempt from tariffs on equity and derivatives transactions, but ethical or socially responsible funds will not, the ministry clarified.

      Companies that buy shares in their controlled entities, or buy back their own stock to eliminate shares, also won't pay the new tax destined to hit both counterparties in most equities transactions.

      The FTT is nicknamed after Nobel Laureate economist James Tobin who in 1972 proposed a tax on all spot conversions on currencies to prevent attacks inflicted by short-term speculation, but has come to refer to taxes imposed also on other financial transactions, like equities or securities, intended to dampen speculative forays or raise more money for governments from the financial sector.

      In September 2011, the European Commission issued a set of guidelines to help member states harmonize their FTT measures, saying EU countries increasingly sought FTTs so that the financial sector ''makes a fair and substantial contribution to public finances'' and ''pay(s) back at least part of what the European tax payers have pre-financed in the context of the bank rescue operations'' caused by the financial crisis since 2008.

      Several European countries have already instituted FTTs, including Belgium, France, Poland, Finland, Sweden and Greece.

      Photo: Economy Minister Fabrizio Saccomanni
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