Italian lawmakers are to delay the introduction of a financial transaction tax on derivatives and high-frequency trades by at least two months, reflecting growing uncertainty over the tax which is being closely watched ahead of a proposed transaction tax across 11 European Union countries next year.
The Italian Ministry of the Economy and Finance levied an FTT on equity transactions at the start of March, and was set to extend this to derivatives and so-called "high-frequency" transactions at the start of July. However, growing uncertainty over how to implement the derivatives tax has resulted in the levy being postponed until September 1.
The impact of the Italian FTT is being closely watched ahead of a wider tax being drawn up by a group of EU Member States. Italy is one of 11 countries that have backed a European Commission plan to impose a 0.1 per cent levy on stock and bond trades and 0.1 per cent tax on derivatives trades from 2014.
"Both of these postponements are welcome given the uncertainty there has been in recent months on the detailed operation of the rules. It will hopefully give the Italian tax authorities time to issue detailed guidance on some of the more difficult issues before the point at which the tax enters into force", Ernst & Young said.
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