A European Financial Transactions Tax: Revenue and GDP effects for Germany

Copenhagen Economics, March 2014

This is a study on expected revenues of the European Financial Transactions Tax (FTT), written by Copenhagen Economics at the request of the German Finance Ministry.

The report states that Germany alone could raise €17.5 billion in revenues a year from the European FTT. Download the full document here.

A summary of the report:

1. The tax base in Germany ranges between €18.5 trillion and €188.8 trillion depending on whether for derivatives the face value or the market value of the underlying is considered.

2. The tax revenues would be €28.2 billion (based on the 0.1% and 0.01% rate of the Commission’s proposal) if there was no evasion/avoidance by the finance industry, and €17.6 billion taking into account evasion/avoidance.

3. €10 billion of the tax revenues would come from shares and bonds and €7 billion from derivatives, reflecting the structure of German trade.

4. The report calculates a small negative effect on German GDP of €0.6 – 2.4 billion (0.02 – 0.09% of GDP), which would be largely compensated if the revenue were to be used for productive purposes.