TAX ON BANK EXTRA-PROFITS: A NEW VERSION UNDER PARLIAMENTARY SCRUTINY

As already addressed previously, the Government has been working since August to structure an extraordinary tax – burdening the banks’ 2023 budget – in order to deal with the increase in interest rates on mortgages. Compared to the first draft, during the parliamentary process a real metamorphosis of the tax was achieved. In fact, an amendment was filed to the Legislative Decree. Asset that integrates the tax plan with multiple corrective interventions. Among these we highlight: ➡Recalibration of the rate “to 40% on the amount of the interest margin” of the 2023 financial year “which exceeds the same margin” of the 2021 financial year by at least 10%. ➡Banks are expressly prohibited from transferring the relevant charges from the tax on extra profits “to the costs of services provided to businesses and end customers. The Competition and Market Authority supervises the strict observance of the provision also through random checks and reports annually to Parliament with a specific report”. ➡Change of the maximum tax ceiling from 0.1% to 0.26% of the total amount of risk exposure on an individual basis. That is, we move from total assets to risk-weighted assets, thus excluding government bonds. It is still rather difficult to estimate what the effects will be on the economy, however, according to the initial considerations of analysts, as far as the banking sector is concerned, the remodulation of the tax will have positive effects as it will reduce its impact and will predictably cost the system a amount between 1.5 and 2.2 billion euros.