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Because the mutual banks will be excluded from the tax on banks’ extra profits

7 months ago babelfish

Because the mutual banks will be excluded from the tax on banks' extra profits

What changes for the tax on the so-called extra profits of banks. The speech by Marco Bindelli, vice president of Banco Marchigiano and managing director for relations with cooperative credit and the parent companies (Ccb Group)

Last October 9th it was published in the Official Gazette no. 236 Law no. 136 of conversion, with substantial modifications, of the Legislative Decree of 10 August 2023 n. 104, containing the art. 26 entitled "Extraordinary tax on the increase in the interest margin", improperly defined as a tax on the extra profits of banks obtained thanks to the increase in interest rates decided by the European Central Bank.

WHY BCC SHOULD BE EXCLUDED FROM THE TAX ON BANKING EXTRA PROFITS

Precisely in this magazine , immediately after mid-August, a brief examination was proposed of the reasons that should have led the legislator to modify the aforementioned Law Decree in order to completely exclude the cooperative credit banks (Bcc), the Rural Banks (Cr) and the Raiffeisenkasse from the application of the extraordinary tax on bank extra profits.

In addition to avoiding both greater taxation for the two parent companies (Cassa Centrale Banca and Iccrea Banca) and a possible phenomenon of substantial double taxation for each of the two cooperative banking groups, the request for total exemption concerned the legal consideration of the substantial absence of distribution of profits produced by the Bcc, Cr and Raiffesenkasse and therefore of the non-availability and indivisibility of their assets, a parameter capable of ensuring banking stability and increasing the ability to provide credit.

It was also explained that as a result of the immoral "too big to fail" principle, the large joint-stock banks, which have long been facilitated in banking regulation and supervision, have always seen their losses socialized ( in fact, attributed to Italian taxpayers) when rates were low or when they wanted to hastily and rigidly apply the so-called "Bail in" and at the same time enriched the shareholders (usually foreign funds other than Italian taxpayers) in prosperous periods; contrary to what happened in cooperative credit where the crises of the Bcc/Cr have always been faced solely with their own resources and with the contribution to the resolution of those produced by the joint-stock banks.

THE GOVERNMENT AMENDMENT

Well, thanks also to the intervention of Federcasse who presented herself on 12 September at a hearing in the Senate before the joint Commissions of Environment and Productive Activities, the government accepted the cooperative credit requests and produced an amendment which, although not having excluded subjectively the Bcc/Cr and the Raiffeisenkasse, has, in fact, completely exempted them through the provision of the possibility of allocating an amount of no less than 2.5 times the tax due to a non-distributable reserve and the inclusion of a specific clause for cooperative credit with which it is foreseen that " the profits allocated to the legal reserve pursuant to art. 37 paragraph 1 of the consolidated text of the laws on banking and credit matters referred to in the legislative decree of 1 September 1993, n. 385 ” (art. 26, paragraph 5-bis).

In light of the changes made, the extraordinary tax will therefore affect exclusively the profit-making banks that decide to distribute the 2023 profit to shareholders; these banks, although they will be able ( as rightly observed by Liturri ) to distribute the profit reserves formed in previous years tax-free, will however have to pay the extraordinary tax plus interest accrued per year in the event of future use of the reserve set aside for the distribution of dividends.

Furthermore, the regulatory change introduced by the government, in addition to solving the problem of double taxation, should induce the two joint-stock parent companies, Cassa Centrale Banca and Iccrea Banca, to seek budget and dividend policies consistent with the objectives of the cooperative banking group .

IN CONCLUSION

In conclusion, it is recalled that the definitively approved rule has been further corrected and mitigated since it has redefined and better identified the perimeter of the taxable value of the interest margin on which the extraordinary tax is calculated and has excluded the value of the Securities from the calculation of the State, affecting (in fact) only the so-called risk-weighted assets.

Finally, with the new paragraph 6-bis it was forbidden to transfer the weight of the new tax to the costs of the services offered by banks to their customers and the power of control was attributed to the Antitrust.

The effectiveness of this ban remains to be verified.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/esclusione-bcc-tassa-extraprofitti-banche/ on Thu, 12 Oct 2023 05:56:14 +0000.