Bank Taxes in Europe

December 19, 2019

The 2007-2008 financial crisis triggered a global debate on whether, and if so how, taxation can be used as an instrument to stabilize the financial sector and to generate revenue to partially cover the costs associated with the recent and potential future crises.

Three approaches were mainly discussed, namely

  • financial stability contributions (levied on financial institutions’ liabilities and/or assets)
  • financial activities taxes (levied either on financial institutions’ profits or remunerations)
  • financial transaction taxes (levied on trade in financial instruments such as stocks, bonds, derivatives, and currencies)

Today’s map shows which European OECD countries implemented financial stability contributions, commonly referred to as “bank taxes.”

What is a Bank Tax? Compare bank Taxes in Europe. The 2008 financial crisis triggered a global debate on whether taxes can be used as way to stabilize the financial sector (financial institutions).

Austria, Belgium, France, Greece, Hungary, Iceland, Latvia, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Sweden, and the United Kingdom all levy bank taxes. Almost all of these countries implemented the levy between 2009 and 2012, with Greece (1975) and Poland (2016) the only exceptions.

Most countries levy their bank tax on a measure of liabilities or a measure of assets. However, some countries decided on a different tax base. For example, France taxes the minimal amount of capital necessary to comply with the regulatory requirements.

Financial Stability Contributions (“Bank Taxes”) in European OECD Countries as of 2019

Notes:
*Slovakia’s government approved a bill to double the tax rate in 2020.

**Exceptions apply depending on the stock and growth of lending to non-banks.

Sources: European Union, “Taxes in Europe Database”; Bloomberg Tax, “Country Guides”; Devereux, Johannesen, Vella “Can Taxes Tame the Banks? Evidence from the European Bank Levies”; and European Union, “Technical Fiche: Tax Contribution of the Financial Sector.”

Country Tax Rate Tax Base Year of Implementation
Austria (AT) 0% – 0.258% Total liabilities net of equity and insured deposits 2011
Belgium (BE) 0.13231% Debt towards clients 2012
France (FR) 0.25% Minimum regulatory capital requirement 2011
Greece (GR) 0.6% Value of the credit portfolio 1975
Hungary (HU) 0.15% – 0.2% Total assets net of interbank loans 2010
Iceland (IS) 0% – 0.376% Total debt 2011
Latvia (LV) 0.036% Total liabilities net of equity and insured deposits 2011
Netherlands (NL) 0% – 0.044% Total liabilities net of equity and insured deposits 2012
Poland (PL) 0.44% Total assets 2016
Portugal (PT) 0.05% Total liabilities net of equity and subordinated debt 2011
Slovakia (SK)* 0.2% Total liabilities net of equity and insured deposits 2012
Slovenia (SI)** 0.1% Total assets 2011
Sweden (SE) 0.036% Total liabilities net of equity and insured deposits 2009
United Kingdom (GB) 0% – 0.15% Total liabilities net of equity and insured deposits but netting of gross assets and liabilities against the same counterpart and deduction for liquid assets 2011

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