The Financial Transaction Tax was implemented in Italy very recently and is, frankly, nothing to worry about. The other taxes were much worse: a new 0.1 % - 1 per thousand tax on your entire portfolio value and raising the withholding tax to from 12.5% to 20% on dividends and on capital gain, that was awful especially when we consider that shareholders pay a very hefty corporate profit tax which is not recoverable in any way.
Forex transactions are taxed at 20% but you can deduct losses for the year and for four subsequent years. That was the case already before the recent FTT. Forex income is taxed liked income on shares and derivatives. There is no further FTT as far as I know.
Regarding the FTT (or "Tobin tax" as they inexactly call it) it really did not cause problems to day traders.
The terms are as follows:
Share trading.
0,1% (1 per thousand) of the value exchanged, to be paid only by the buying side. That is applied only on transaction on shares which have a capitalization of more than €500m. Day-trading operations are not taxed. There is a specific provision for high-frequency trading (defined as an operation which is opened and closed within one second), but the tax is very low (don't remember now).
If you consider that a spread of 2 per thousand is normal, and a commission on each trade of 2 per thousand is normal, the recent tax raises the total cost of trading from 6 per thousand to 7 per thousand. That is, I repeat, only on certain kind of shares, and only for multi-day operations.
Derivatives (starting from July 1st).
Things are more complicated, but it remains pretty cheap.
The tax is paid always (every instrument, and including day-trades).
The tax is paid according to a table which considers the "notional value" of the contract (the value of the underlying which is controlled by the contract) and the kind of operation.
The tax is NOT due if the underlying is a predominantly foreign index or a foreign stock (!).
Two examples with Covered Warrants:
Buy 2000 CW on the FTSE/MIB. Each CW has a multiplier of 0.0001, you need 10.000 to buy the entire FTSE/MIB (minimum purchasing quantity is 100, 1% of the index). So with 2000 CW you buy 1/5 of the index. The FTSE/MIB is around 17.000 Euros, so you buy €3200 of notional value.
The table says for this transaction you pay €0.0375 (that's right: less than 4 Eurocents). Remember you pay it both when you open the position and when you close it.
With my broker the minimum commission is €2.95. With the tax added, the commission becomes €2.9875. No big difference, shall I say.
NB: the value of the purchase is irrelevant. What counts is the amount of underlying you "control" with the derivative. A purchase of 2000 CWs costs that tax, whether each CW costs €0.30 or €0.03.
A second example, this time wich a CW on a common share.
Let's say you buy 2000 CW on ENI. The multiplier for CWs on common shares is 0.1 (you need ten CWs to "control" one share). So the notional value is ENI * 200 = around €3200.
In the table, for this situation you pay €0.25.
Third example, you buy 2000 CW on FIAT. The notional value is FIAT * 200 = around €1000.
In this case you pay €0.125.
The "problem" with derivatives is that you pay also for intraday activities and if you are the kind of trader that makes 10 or 20 round trips per day, that begins being a tax that is not negligible. (in the second example, 20 round trips means that's €10 Euros per day, which for let's say 200 days of trading means €2000 per year).
The easy escape is to trade a derivative on a foreign index or a foreign share, as said.
Remember you pay the FTT whether you win or lose, it's not a tax on an income.
Even if I made my income from day trading I wouldn't feel the need to emigrate so far. That does not mean I think the tax is well written. It unduly distorts the market by favouring operations on foreign stocks. It's easy to predict that many new instruments will be created on foreign stocks in the near future.
