14. 6. 76 Official  Journal  of the  European  Communities No C 133/1 
II 
(Preparatory  Acts) 
COMMISSION 
Proposal  for a Council  Directive  concerning  indirect  taxes  on transactions  in securities 
(Submitted  by the Commission  to the Council  on 2 April  1976) 
THE  COUNCIL  OF THE  EUROPEAN  COMMUNITIES, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Articles  99 and  100  thereof, 
Having  regard  to the proposal  from  the Commission, 
Having  regard  to the  opinion  of the  European 
Parliament, 
Having  regard  to the  opinion  of the  Economic  and 
Social  Committee, 
Whereas  the  movement  of capital  within  the  Com-
munity  is hampered  by the  differences  existing  be-
tween  the  laws  in force  in the  Member  States  with 
regard  to taxes  on capital  movements;  whereas,  in 
order  to achieve  free  movement  of such  capital,  it is, 
therefore,  essential  that  these  laws  be harmonized  so 
as to eliminate  the major  disparities; 
Whereas,  in order  to attain  this  objective,  the Council 
adopted,  in 1969,  a Directive  concerning  indirect 
taxes  on the  raising  of capital  (1), which  abolishes 
stamp  duty  on securities  and  harmonizes  as between 
Member  States  the  duty  on contributions  to capital 
companies;  whereas,  in 1973,  it also  adopted  a Direc-
tive fixing  common  rates  of capital  duty  which 
entered  into  force  on 1 January  1976  (2); 
(!) OJ  No L 249,  3. 10. 1969,  p. 25. 
(2) OJ  No L 103,  18. 4. 1973,  p. 15. Whereas  it is advisable  to continue  in this  direction 
by similarly  harmonizing  indirect  taxes  on  trans-
actions  in securities;  whereas  these  taxes  as at present 
levied  by Member  States  often  give  rise,  as between 
those  States,  to double  taxation,  discrimination  and 
other  differences  of a nature  such  as to distort  the 
normal  flow  of capital; 
Whereas  the  abolition  of indirect  taxes  on  trans-
actions  in securities  would  have  been  the  most 
desirable  means  of eliminating  such  disparities  with 
regard  to the proper  functioning  of the capital  market 
but cannot  be contemplated  at the  present  time  in 
view  of the  budgetary  requirements  of  Member 
States; 
Whereas,  with  a view  to attaining  in substance  the 
above  objectives,  it is necessary  to establish  conver-
gent structures  in Member  States  for  the  admini-
stration  of these  taxes  in order  to ensure,  in respect 
of intra-Community  transactions,  a demarcation  of 
the powers  of taxation  between  the  Member  States 
and, as far as possible,  to avoid  double  taxation; 
Whereas  Member  States  which  so desire  should,  none 
the less,  remain  free  to abolish  or not  to introduce 
such  taxes  in their  legislation; 
Whereas,  on account  of the  technical  difficulties  and 
repercussions  which  could  ensue  in the United  King-
dom  and  Ireland  from  a substantial  change  in the 
system  of control  over  securities  and  companies,  it 
seems  desirable  that  the said  States  should  be permit-
ted to derogate,  in part  and  under  certain  circum-
stances,  from  the system  provided  for in this  Directive 
in respect  of transactions  in registered  securities 
registered  in the United  Kingdom  or in Ireland; 
No C 133/2 Official  Journal  of the European  Communities 14. 6. 76 
Whereas,  for economic  reasons,  a number  of common 
exemptions  should  be laid  down;  whereas,  among 
the measures  to facilitate  the eventual  abolition  of 
these  taxes,  it would  appear  advisable  to permit 
Member  States  to maintain  the exemptions  applicable 
in each  of them  on the date  of entry  into  force  of the 
Directive; 
Whereas,  with  regard  to rates,  it would  appear  that 
disturbances  on the  capital  market  could  be ad-
equately  averted  by imposing  maximum  rates  of tax, 
since  this  would  permit  Member  States  which  so wish 
to obtain  a reasonable  level  of revenue  from  this  tax, 
whilst  leaving  open  the possibility  of applying  lower 
rates, 
HAS  ADOPTED  THIS  DIRECTIVE: 
Article  1 
Member  States  which  impose  a tax  on transactions 
in securities  shall  levy  it in accordance  with  this 
Directive. 
Article  2 
1. For  the  purposes  of this  Directive,  a taxable 
transaction  is the  disposal  or  the  acquisition  of 
securities  for  valuable  consideration,  where  the 
transaction  is concluded  in a Member  State  or is 
concluded  in a non^member  country  by a resident 
of a Member  State.  Each  disposal  or acquisition  of 
securities  constitutes  a separate  taxable  transaction. 
2. Collection  of the  tax  may  be deferred  for  not 
more  than  four  months  from  the conclusion  of the 
transaction. 
Article  3 
1. Notwithstanding  Articles  2 and  5, the  United 
Kingdom  and  Ireland  may  regard  as a single  taxable 
transaction  the disposal  and  acquisition  of registered 
securities  registered  in the  United  Kingdom  or in 
Ireland. 
2. The  tax shall  not be levied  in the United  Kingdom 
or in Ireland  where  a resident  of a Member  State 
who  has  acquired  a certificate  representing  a regis-tered  security  issued  in the  United  Kingdom  or in 
Ireland,  registers  in either  of the  two  countries  his 
title to the securities  specified  in the certificate. 
3. Should  it be found  that  application  of paragraph  1 
leads  to diversions  in transactions  on the  securities 
market,  the  Council,  on a proposal  from  the Com-
mission,  shall  take  a decision  on  appropriate 
measures  by a qualified  majority  within  six months. 
Article  4 
1. The  Member  States  shald  take  the necessary  steps 
to exempt  from  the tax the following  transactions: 
(a) the issue  of securities,  and  the first  acquisition  of 
securities  immediately  consequent  upon  such 
issues; 
(b) the first  assignment  by  members  of issuing 
consortia  who  have  acquired  securities  with  a 
firm option,  and  the 'first  acquisition  of securities 
corresponding  to that  assignment; 
(c) the disposal  and  the  acquisition  of bonds  with 
a maximum  length,  at the  date  of issue,  of five 
years; 
(d) acquisitions  by the  issuer  of his own  bonds  for 
redemption. 
2. Transactions  involving  one  or more  professional 
intermediaries  shall  be liable  to the tax only  in respect 
of the  operations  of the  transferors  and  the  trans-
ferees.  The  Member  States  may,  however,  levy  the 
tax on transactions  carried  out  by professional  inter-
mediaries  for their  own  account,  with  the exception 
of transactions  carried  out  by collective  investment 
undertakings. 
3. Without  prejudice  to subsequent  Community 
provisions,  Member  States  may  also  retain,  subject 
to the application  of paragraphs  1 and  2 above  and 
of Article  9, exemptions  more  extensive  than  those 
specified  in paragraph  1 or other  exemptions,  whether 
such  exemptions  are specified  in national  legislation 
or result  from  a more  limited  field  of application  of 
the tax  than  is established  by Article  2 above,  on 
condition  that  such  exemptions  apply  on the date  of 
entry  into  force  of this  Directive.  Member  States 
shall  notify  the Commission  thereof  not  later  than 
one month  after  entry  into  force  of the Directive. 
4. Where  a Member  State  intends  to introduce  new 
exemptions,  it shall  so inform  the  Commission  in 
good  time  and  in writing.  The  Commission  shall 
consult  the other  Member  States  and  take  a decision 
on the  matter.  The  Member  State  concerned  may 
14. 6. 76 Official  Journal  of the European  Communities No C 133/3 
only implement  the new  exemptions  after  receipt  of 
a favourable  Commission  decision  or, in the absence 
of a Commission  decision,  within  six months  of the 
date of notification  to the Commission. 
Article  5 
The Member  States'  powers  of taxation  shall  be 
determined  as follows: 
1. Where  the professional  intermediaries  intervening 
in a transaction  reside  in Member  States  which  apply 
the tax: 
— the  tax  on the  disposal  shall  be payable  in the 
Member  State  in which  the  professional  inter-
mediary  acting  for the transferor  resides  and  the 
tax on the  acquisition  shall  be  paid  in the 
Member  States  in which  the  professional  inter-
mediary  acting  for the transferee  resides. 
2. Where  no professional  intermediary  intervenes  or 
where  the  intervening  professional  intermediaries 
reside  in non-member  countries  or in Member  States 
that do not apply  the tax: 
(a) where  both  parties  to the  transaction  reside  in a 
Member  State  that  applies  the tax: 
— the  tax on the disposal  shall  be payable  in the 
Member  State  in which  the transferor  resides 
and the tax on the acquisition  in the Member 
State  in which  the transferee  resides; 
(b) where  one  of the parties  to the transaction  resides 
in a non-member  country  or in a Member  State 
that does  not apply  the tax: 
— the  tax  on the  disposal  or the  tax  on the 
acquisition  shall  be payable  in the  Member 
State  in which  the transferor  or the transferee 
resides; 
(c) where  both  parties  to the  transaction  reside  in a 
non-member  country  or in a Member  State  that 
does  not apply  the tax: 
— the  tax  on the  disposal  and  the  tax  on the 
acquisition  shall  be payable  in the  Member 
State  in which  the transaction  is concluded. 
Article  6 
1. The  question  whether  a natural  person  other  than 
a professional  intermediary  is resident  in a Member 
State  shall  be determined  in accordance  with  the 
following  rules,  which  shall  be applied  in the order 
in which  they  are listed: 
(a) a person  shall  be  treated  as resident  in the 
Member  State  in which  he has a permanent  place 
of residence.  If he has  a permanent  place  of 
residence  in two  or more  Member  States,  he shall 
be deemed  to reside  in that  Member  State  with which  he has the closest  economic  and  social  ties 
(principal  place  of residence); 
(b) if a person  has  no permanent  place  of residence 
in any  Member  State,  he shall  be  treated  as 
resident  in the  Member  State  in which  he stays 
habitually; 
(c) if, applying  rule  (a),  the  principal  place  of 
residence  cannot  be determined  and  if, applying 
rule (b),  the person  is found  to stay  habitually  in 
two or more  Member  States,  he shall  be deemed 
to reside  in that  Member  State  of which  he is also 
a national; 
(d) if he is a national  of two  or more  Member  States, 
or if he is not  a national  of any  Member  State, 
the competent  authorities  of the  Member  States 
shall  settle  the question  by agreement. 
2. A person  other  than  a natural  person  or profes-
sional  intermediary  shall  be deemed  to reside  in a 
Member  State  when  he acts  as a transferor  or trans-
feree  of securities  and  when,  according  to the 
circumstances,  either  the  effective  management 
control,  the  registered  office  or a permanent  estab-
lishment  is situated  in that  Member  State. 
3. A professional  intermediary  shall  be deemed  to 
reside  in the  Member  State  in which  he has  his 
permanent  establishment.  A professional  intermediary 
who has  permanent  establishments  in two  or more 
Member  States  shall,  for the purposes  of Article  5, be 
deemed  to reside  in the  Member  State  in which  the 
permanent  establishment  acting  for the transferor  or 
for the transferee  of the securities  is situated. 
Article  7 
1. The  tax  shall  be assessed  on the  agreed  price. 
Where  no price  has been  agreed  or where  the agreed 
price  differs  from  the  actual  value  of the  securities 
concerned,  Member  States  may  assess  the tax on this 
value  or on the average  price  of the securities. 
2. Interest  on  fixed-income  securities  which  has 
accrued  between  the  last  coupon  payment  and  the 
date of a transaction,  and  expenses  incidental  to a 
transaction,  such  as brokerage  of intermediaries, 
commission  and  the tax on the transaction  itself,  shall 
be excluded  from  the basis  of assessment. 
Article  8 
1. The  rate  of the tax shall  not exceed: 
(a) l-5°/oo  for bonds; 
(b) 3°/oo  for other  securities. 
No C 133/4 Official  Journal  of the European  Communities 14. 6. 76 
Within  these  limits,  the rate  applicable  to transactions 
made  on account  in the bonds  mentioned  at (a) and 
in the  other  securities  mentioned  at (b) may  differ 
from  that  applicable  to cash  transactions. 
2. In the  case  of transactions  in the  registered 
securities  referred  to in Article  3 (1),  the rate  of the 
tax shall  be twice  that  applied  in accordance  with 
paragraph  1. 
Article  9 
Member  States  shall  refrain  from  all discriminatory 
treatment  based  on the residence  of the issuer  of the 
securities  or on the residence  of those  involved  in the 
transaction. 
Article  10 
1. No  form  of tax assessed  on the basis  of the value 
of the  security  involved  in the  transaction,  whether 
or not  charged  at a flat  rate,  other  than  the  tax 
provided  for  in this  Directive,  shall  be charged  on 
transactions  in securities. 
2. Notwithstanding  paragraph  1, Member  States 
may charge: 
(a) capital  duty,  as defined  by Council  Directive  69/ 
335/EEC  of 17 July  1969  (*); 
(b) transfer  duties  on immovable  property  where,  as 
a result  of transactions  in shares  in companies, 
funds,  associations  or other  legal  persons  whose 
assets  consist  in whole  or in part  of immovable 
property  situated  in their  territory,  the purchaser 
acquires  all the assets  or a position  by virtue  of 
which  he is able  to exercise  control  over  these 
companies,  funds,  association  or  other  legal 
(!) OJ No L 249,  3. 10. 1969,  p. 25. persons.  In this  case,  transfer  duties  shall  apply 
only in respect  of the  value  of the  immovable 
property,  such  value  being  determined  in accord-
ance  with  national  legislation; 
(c) value  added  tax  applicable  to interests  or giving 
the holder  thereof  de jure  or de facto  rights  of 
ownership  or possession  over  immovable  property 
or part  thereof; 
(d) transfer  duties  on  transactions  in  securities 
effected  for  a consideration  other  than  their 
market  value. 
Article  11 
Member  States  shall  bring  into  force  such  provisions 
by way  of laws,  regulations  or administrative  action 
as may  be necessary  to comply  with  the  provisions 
of this  Directive  at the  latest  by 1 January  of the 
second  year  following  that  of its adoption. 
Article  12 
Member  States  shall  ensure  that  the texts  of the main 
provisions  of internal  law  which  they  subsequently 
adopt  in the field  covered  by this  Directive  are for-
warded  to the Commission. 
Article  13 
So that  the  relevant  conclusions  can  be drawn  for 
further  harmonization  of taxes  on transactions  in 
securities,  the  Commission  shall  submit  a report  to 
the Council,  every  two  years  after  the application  of 
the Directive  by  Member  States,  on  subsequent 
developments  in the field  covered  by this  Directive. 
Article  14 
This  Directive  is addressed  to the Member  States. 
ANNEX 
Definitions 
I. For the purpose  of this  Directive,  the following  shall  be considered  to be securities: 
1. shares  and  other  stocks  in the following  'capital  companies': 
(a) companies  under  Belgian,  Danish,  German,  French,  Irish,  Italian,  Luxembourg, 
Netherlands  and  United  Kingdom  law  known  respectively  as: 
14. 6. 76 Official  Journal  of the European  Communities No C 133/5 
— societe  anonyme/naamloze  vennootschap,  aktieselskab,  Aktiengesellschaft, 
societe  anonyme,  companies  incorporated  with  limited  liability  (excluding  private 
limited  companies),  societa  per  azioni,  societe  anonyme,  naamloze  vennootschap, 
companies  incorporated  with  limited  liability  (excluding  private  limited  com-
panies); 
— societe  en commandite  par  actions/commanditaire  vennootschap  op  aandelen, 
kommandit-aktieselskab,  Kommanditgesellschaft  auf Aktien,  societe  en comman-
dite par  actions,  societa  in accomandita  per  azioni,  societe  en commandite  par 
actions,  commanditaire  vennootschap  op aandelen; 
(b) any  company,  firm,  association  or legal  person  the  shares  in whose  capital  or assets 
can be dealt  in on a stock  exchange; 
(c) any  company,  firm,  association  or legal  person  operating  for profit,  whose  members 
have  the right  to dispose  of their  shares  to third  parties  without  prior  authorization 
and are  only  responsible  for  the  debts  of the  company,  firm,  association  or legal 
person  to the extent  of their  shares; 
2. bonds,  including  convertible  and  exchangeable  bonds  (i.e.  securities  issued  to represent 
a loan  and  transferable  by the forms  of commercial  law); 
3. shares  or units  in collective  investment  undertakings; 
4. subscription  rights  and  similar  securities; 
5. certificates  representing  such  securities; 
6. letters  of allotment. 
whether  or not  issued  in a Member  State,  whether  registered  or bearer  securities,  whether 
or not  quoted  on a stock  exchange. 
II. For the purpose  of this  Directive,  the following  may  be considered  to be securities: 
1. shares  in societe  de personnes  a responsabilite  limitee/personenvennootschap  met  be-
perkte  aansprakelijkheid,  Gesellschaft  mit  beschrankter  Haftung,  societe  a responsabilite 
limitee,  private  limited  companies,  societa  a responsabilita  limitata,  societe  a responsa-
bilite  limitee,  private  limited  companies; 
2.. loan  participations  forming  part  of a global  loan  which  are transferable; 
3. securities  or shares  in any  company,  firm,  association  or legal  person  operating  for 
profit  other  than  those  specified  in definitions  I and  II, 1 and  2 above,  where  in a 
Member  State  they  are considered  to be 'capital  companies'. 
III. For the  purposes  of this  Directive,  a taxable  transaction  is concluded  by the  written  or 
verbal  agreement  of the parties  to the transaction. 
IV. For the  purposes  of this  Directive,  a professional  intermediary  is a natural  or legal  person 
who,  in a professional  capacity,  intervenes  in transactions  in securities.  This  definition 
includes  commission  agents,  banks  and  other  institutions  recognized  as dealers  in securities, 
stockbrokers,  intermediate  brokers  and  jobbers,  except  where  they  act  as nominees  or as 
administrators  of capital  assets,  e.g.  trustees.  This  definition  also  includes  collective 
investment  undertakings,  by which  is understood  investment  companies  and  unit  trusts 
whose  principal  object  is the collective  investment  of capital  collected  by means  of offers 
to the public,  and  whose  operations  are based  on principle  of distribution  of risks. 
V. For the  purposes  of this  Directive,  'issue  of securities'  means  the  allotment  of securities 
by the issuer,  including  that  resulting  from  capitalization  of reserves.