Bill proposes 75% tax on big banks' windfall profits

Automatic summary, not yet reviewed

1. The bill would create a temporary levy on big banks' extraordinary margins, payable in 2027, 2028 and 2029. It would only affect credit institutions with interest and commission income of €800 million or more in 2019.
2. The standard levy would be 10% of the previous year's interest and commission margin. In addition, 75% would apply to anything more than 5% above the total for the first half of 2022, with an advance payment of 57% in February.
3. Banks could not pass the cost of the levy on to their customers. Doing so would be a very serious offense, with a fine of 150% of the amount passed on, and the CNMC (competition watchdog) would monitor compliance.
4. The money raised would go to a fund managed by the Ministry of Transport to lend to local governments to build public social rental housing in tight housing markets, for vulnerable people on the waiting list for public housing.
5. The explanatory statement justifies the measure by banking concentration, the 2008 bailout with €60 billion unrecoverable, and record bank profits. It considers the current bank tax under Law 38/2022 insufficient.
6. The law would take effect on the first day of the fiscal year after its publication in the Official State Gazette.

Who it affects

• Large banks and credit institutions with interest and commission income of €800 million or more (2019).: They would have to pay the new temporary levies in 2027, 2028 and 2029, with an advance payment in February.
• Vulnerable people on the waiting list for public housing.: They would be the intended residents of the public social rental housing built with the fund.
• Municipalities and local entities in tight housing markets.: They could receive credit from the fund to build public rental housing.
• Bank customers.: Banks could not pass the cost of the levy on to them, on pain of a 150% fine.

Words worth knowing

Gravamen

A charge or payment obligation imposed on someone, similar to a tax.

Prestación patrimonial de carácter público no tributario

A mandatory payment to the State that is not technically a tax, though it works in a similar way.

Consolidación fiscal

A regime in which several companies in the same group file taxes together, as if they were one.

Vivienda de protección oficial

Public housing with capped prices for people with fewer resources.

Zonas tensionadas

Areas where rents have risen sharply and access to housing is difficult.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries