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Financial Transaction Tax

Financial Transaction Tax (FTT)

With the introduction of a Financial Transaction Tax (FTT), the European Union aims at ensuring the financial sector contributes its fair share to dealing with the consequences of the financial crisis. Deutsche Börse Group understands this objective. However, it is of the opinion that this is already being achieved with other initiatives which have been realised to promote financial market stability.


The European Commission, as well as the German Federal Government, have already presented a variety of initiatives on the introduction of an FTT. Currently ten Member States of the European Union, including Germany and France, are debating the introduction of an FTT, with a view to its implementation under enhanced cooperation. The practical details and geographic reach of such a tax are currently under intense discussion on a national and European level. Both aspects are of outstanding importance for  European financial market infrastructures.

At the same time, such a tax creates risks: it endangers economic growth, which is crucial to Europe’s current economy, and provides strong incentives to transfer business to non-participating countries. It would also be detrimental to those saving for retirement.

An FTT in its current design is contrary to the idea of a growth-promoting European Capital Markets Union (CMU). The tax-burden would largely be borne by the real economy and by depositors. It would shift business activities and transactions to less strictly regulated jurisdictions not subject to the tax.

Time line

On 14 February 2013, the European Commission tabled a proposal for a Council Directive implementing enhanced cooperation in the area of the FTT. On 8 December 2015, the remaining ten Member States reached an agreement “in principle”. They are now working with the European Commission on a new proposal based on the latest discussions. The originally envisaged deadline –  the end of June 2016– has not been adhered to. Especially smaller Member States were concerned about the viability of the FTT and are considering withdrawing from the project.

FTT: the highlighted parts of the value chain are affected