Spain to introduce Financial Transaction Tax
30 November 2018 Madrid
Image: Shutterstock
Spain will be the next European country to introduce the Financial Transaction Tax (FTT)
The decision is estimated to raise €8.45 billion ($9.57 billion) in 2019, according to its Government’s forecasts.
FTT requires taxes to be collected for regular cash market transactions. It is currently utilised in France and Italy and is charged only on the specific transactions that are designated as taxable.
The main objective of the FTT is to introduce the tax system into the financial sector and to increase the tax collection of the States.
In this case, however, it also responds to the need to justify the budget plan presented by Madrid in Brussels last October, where the Spanish Government proposed a deficit reduction of 0.4 percent for next year instead of the 0.65 percent suggested by the European Commission.
Back in 2014, asset managers, pension funds, banks and insurers expected to spend more on tax and regulations in 2015 as well as the following years, according to a poll by BNY Mellon at its annual Tax and Regulatory Forum.
Daniel Carpenter, head of regulation at Regtech firm, Meritsoft, said: "Spain is not the first, and certainly will not be the last country to enforce a tax on financial transactions, they’re merely following the French and Italian authorities lead.”
He added: “As global financial drivers and political pressure mounts, financial institutions can ill afford to be unprepared for the implementation of new taxes on the buying and selling of securities.”
“This is why an increasing number of firms are reviewing manual/spreadsheet tactical solutions and need new ways to minimise tax obligations improve efficiency and remain compliant.”
The decision is estimated to raise €8.45 billion ($9.57 billion) in 2019, according to its Government’s forecasts.
FTT requires taxes to be collected for regular cash market transactions. It is currently utilised in France and Italy and is charged only on the specific transactions that are designated as taxable.
The main objective of the FTT is to introduce the tax system into the financial sector and to increase the tax collection of the States.
In this case, however, it also responds to the need to justify the budget plan presented by Madrid in Brussels last October, where the Spanish Government proposed a deficit reduction of 0.4 percent for next year instead of the 0.65 percent suggested by the European Commission.
Back in 2014, asset managers, pension funds, banks and insurers expected to spend more on tax and regulations in 2015 as well as the following years, according to a poll by BNY Mellon at its annual Tax and Regulatory Forum.
Daniel Carpenter, head of regulation at Regtech firm, Meritsoft, said: "Spain is not the first, and certainly will not be the last country to enforce a tax on financial transactions, they’re merely following the French and Italian authorities lead.”
He added: “As global financial drivers and political pressure mounts, financial institutions can ill afford to be unprepared for the implementation of new taxes on the buying and selling of securities.”
“This is why an increasing number of firms are reviewing manual/spreadsheet tactical solutions and need new ways to minimise tax obligations improve efficiency and remain compliant.”
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