Italy is the latest case in which a European country has imposed a tax on banks on windfall profits generated by high interest rates to help mortgage holders, Reuters reported, citing news.ro

Bankers with a clientPhoto: Adam G. Gregor / Alamy / Alamy / Profimedia

Below is an image of the status of exceptional fees or charges for individual banks in European countries:

CZECH REPUBLIC

In November, the lower house of the Czech parliament approved an exceptional tax of 60% on energy companies and banks, with the aim of raising $3.4 billion this year in what are considered excessive profits to finance aid to individuals and companies hit by electricity and price hikes on gas

FRANCE

President Emmanuel Macron said in March that companies with more than 5,000 employees should share more of their “exceptionally large” profits with employees instead of buying back shares.

But he and Finance Minister Bruno Le Maire have ruled out an exceptional tax. This is because French banks are subject to an anti-usury law that limits the pace of quarterly growth in loan prices.

France also has a popular regulated savings system, which accounts for just under 20% of bank deposits, with inflation-linked returns that adjust faster than lending rates.

GERMANY

For some of Germany’s biggest banks, net interest income is up 50-70% from pandemic lows, but a capital gains tax was off the table for pro-business Finance Minister Christian Lindner.

Germany’s finance ministry declined to comment on Italy’s move in August, but said a tax hike was ruled out under the German coalition government’s deal.

HUNGARY

The Hungarian government amended a one-off tax imposed on key sectors of the economy in a decree published in June, saying banks could reduce their one-off tax payments by up to 50% from 2024 if they increase their purchases of Hungarian government bonds.

It also introduced a new “social tax” of 13% on certain types of investments, including investment bills and interest income from bank deposits.

ITALY

On August 8, Italy approved a flat tax of 40% on profits that banks get from raising interest rates, and plans to use the proceeds to help mortgage holders.

It expects to receive less than 3 billion euros ($3.3 billion) from the tax, according to sources.

Later, the Italian Ministry of Economy clarified that the commission cannot exceed 0.1% of the total assets of creditors. A media report on August 18 said the European Central Bank (ECB) was preparing to send a letter to Italy objecting to the tax and criticizing Rome for not informing the Bank of Italy or the ECB in advance, as it is believed to have done. act according to the rules of the European Union.

LITHUANIA

In May, Lithuania’s parliament approved an exceptional tax on the banking industry’s net interest income for 2023 and 2024, following a sharp interest rate hike by the European Central Bank.

The 60 percent tax on net interest income, 50 percent higher than the four-year average, is expected to raise 410 million euros ($451 million) for the state budget and be used to support the army.

SPAIN

Spain plans to raise 3 billion euros by 2024 from an exceptional tax on banks approved last year, which imposes a 4.8 percent tax on their net interest income and net commissions above a threshold of 800 million euros.

SWEDEN

Sweden’s government last January introduced a “risk fee” on institutions with more than SEK 150 billion ($14.1 billion) in debt related to Swedish operations to shore up public finances and create room for hedging costs, which can be caused by a financial crisis.

The tax was equal to 0.05% of liabilities in 2022 and increased to 0.06% in 2023.

The government expects to attract SEK 6 billion per year.

Great Britain

The UK has not introduced a one-off bank levy, but has levied a bank levy since 2011, introduced in response to the financial crisis, which applies to UK banks’ global balance sheet assets as well as assets belonging to foreign banks’ operations in the UK. .