Overview

Tax Rate

The tax rate for the year 2013 will be 0.12% for shares transacted on regulated markets and MTFs and 0.22% for those transacted outside of these markets. The tax rates are to decrease in 2014 to 0.10% and 0.20% respectively.

The acquisition of the underlying stock upon exercise or delivery of a derivative instrument will be subject to the higher (0.22% in 2013) rate.

Scope

The I-FTT will be applied to shares provided the issuer is resident in Italy. In addition, the I-FTT will be applied to securities representing shares issued by companies resident in Italy (example American Depository Receipts).

The acquisition of shares whose average market capitalization in November of the previous year was less than EUR 500 million will not be subject to the tax.

While at this time the Italian Tax Authorities have not defined corporate actions for which the acquisition of shares may be subject to the I-FTT, traders should be aware that as information is released, IB will assess taxes as required.

Calculation Method

The tax will be calculated on the net settlement per ISIN per final beneficiary per day. The net long share quantity will be multiplied by the average price of the purchase shares. Securities with identical settlement dates will be netted together for the determination of the tax.

In the event the net settlement includes transaction executed both on and off regulated markets, a blended tax rate will be used. For example

Location	Purchase Quantity	Sale Quantity	Price	Net Quantity
Regulated Market / MTF	10	15	50	(5)
Other	15	5	51	10

The final net position of the above transactions is 5

Weighted average purchase price = (10*50 + 15*51) / 25 = 50.60

Tax Base = 5 * 50.60 = 253

Average Tax Rate = (15*0.22% + 10*0.12%) / 25 = 0.18%

Tax Due = 253 * 0.18% = 0.46 EUR

The tax may be due on either the actual settlement date or the contractual settlement date of the transaction. IB intends to calculate the tax based on the contractual settlement date, which on most European venues is T+3 with the exception of the German markets where it is T+2. Please contact IB should you wish to discuss changing this default.

Tax Rate

The tax rate is dependent on the type of financial instrument traded, whether the instrument was traded OTC or on a regulated exchange or MTF and on the value of the contract. The tax is applied per contract.

Scope

The I-FTT will be applied to transactions on derivatives whose underlying assets are mainly I-FTT taxable shares or whole value depends mainly on I-FTT taxable shares. It will also be applied on any other financial instrument which allows the purchase or share of I-FTT taxable shares or involving a cash settlement determined with reference to I-FTT taxable shares.

Calculation Method

The I-FTT will be applied to both the purchaser and the seller of the derivative contract. As such, there is no benefit of netting as there is when trading stocks.

The rates as set for 2013 when trading on a regulated exchange or MTF are outlined below. Note that a transaction occurring OTC will be charged 5 times the rates displayed below. The values displayed below are in EUR.

Instrument	Value < 2,500	2,500 to 4,999	5,000 to 9,999	10,000 to 49,999	50,000 to 99,999	100,000 to 499,999	500,000 to 999,999	1,000,000 +
Futures, certificates, covered warrants, options on yields, measures or indices related to shares	0.00375	0.0075	0.015	0.075	0.15	0.75	1.5	3
Futures, warrants, certificates, covered warrants and options on shares	0.025	0.05	0.1	0.5	1	5	10	20
All other products not listed above	0.05	0.1	0.2	1	2	10	20	40

The information above is being provided on a best efforts basis only and is subject to change.