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The Resource Financial sector taxation

Financial sector taxation

Financial sector taxation
Financial sector taxation
Title variation
Taxation of financial sector
The global economic and financial crisis has created important needs for fiscal consolidation. This document analyses potential instruments to raise additional tax revenues from the financial sector. The first section reviews the current policy objectives related to the taxation of the financial sector. The main goals driving this debate are: the use of taxation as (1) a complement to regulation to correct for negative externalities stemming from the activities of the financial sector, which include the effects of excessive risk-taking; (2) to ensure that the financial sector pays a fair and substantial contribution to public finances, in particular with regard to the economic and financial crisis; (3) to raise funds in the context of the exit-strategy. Section 1 also briefly discusses the link between taxation and regulation. The second section explains the current tax treatment of the financial sector. The third section discusses potential tax instruments to reach the goals outlined above. The Financial Transaction Tax (FFT) and the Financial Activities Tax (FAT) are tax instruments which recently received considerable attention. Both are therefore within the focus of this document. The fourth and fifth section respectively assess the advantages and drawbacks of an FFT and an FAT. The analysis shows that both instruments could be candidates for a tax on the financial sector (FAT) or on financial markets (FTT). An important difference between the two instruments is that the FAT seeks to target the value-added by the financial sector, while the FTT is directed at the transactions executed on financial markets
Geographic coverage
  • European Union
  • Europe
no index present
Language note
Literary form
non fiction
European Commission
Series statement
Taxation papers : Working paper
Series volume
no. 25/2010
  • financial services
  • tax policy
  • bank tax
  • financial transaction tax
  • economic crisis
Financial sector taxation
42 p.

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.3736660 4.9336932
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