Key facts
- UK banks face a total tax rate of 46.4%, according to AFME.
- US banks face a combined tax rate of 27.9%.
- Financial transaction taxes have reduced market activity by up to 35% in some EU states.
- Stamp duty on UK share transactions is 0.5%.
A report by the Association for Financial Markets in Europe (AFME), with research from KPMG, highlights that European banks face high and fragmented tax rates that hinder competitiveness and economic growth. The report, published on October 22, 2026, states that UK banks face a total tax rate of 46.4%, significantly higher than the US rate of 27.9%. AFME argues that these high taxes are often passed on to consumers and businesses through higher fees or reduced lending. Financial transaction taxes in some EU countries have reduced market activity, while the UK's stamp duty on share transactions is seen as a deterrent to investment. AFME recommends recalibrating tax environments, reviewing share trading taxes, and modernizing VAT regimes for financial services.