Bank Taxes in Europe March 18, 2021 Elke Asen Elke Asen 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 (FSCs), commonly referred to as “bank taxes.” Austria, Belgium, France, Greece, Hungary, Iceland, the Netherlands, Poland, Portugal, Slovenia, Sweden, and the United Kingdom all levy bank taxes. Almost all of these countries implemented the levy following the 2007-2008 financial crisis, with Greece (1975) the only exception. Slovakia repealed its bank levy as of January 2021. 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 March 2021 OECD Country Tax Rate Tax Base Year of Implementation Austria (AT) 0.024% – 0.029% Total liabilities net of equity and insured deposits 2011 Belgium (BE) Varying Rates Various tax bases depending on size of institution, risk, and destination of tax payments 2012 France (FR) 0.0642% Minimum regulatory capital requirement 2011 Greece (GR) 0.12% – 0.60% Value of the credit portfolio 1975 Hungary (HU) 0.15% – 0.20% Total assets net of interbank loans 2010 Iceland (IS) 0.145% Total debt 2011 Netherlands (NL) 0.033% – 0.066% Total liabilities net of equity and insured deposits 2012 Poland (PL) 0.44% Total value of assets 2016 Portugal (PT) 0.01% – 0.11% Various tax bases 2011 Slovenia (SI) 0.10% Total assets 2011 Sweden (SE) 0.05% Total liabilities net of equity and insured deposits 2015 United Kingdom (GB) 0.05% – 0.10% Total liabilities net of insured deposits 2011 Note: Most bank taxes have numerous exemptions and thresholds. Sources: European Union, taxes in Europe database; Bloomberg Tax, “Country Guides;” Devereux, Johannesen, and Vella, “Can Taxes Tame the Banks? Evidence from the European Bank Levies;” and European Union, “Technical Fiche: Tax Contribution of the Financial Sector.” Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Center for Global Tax Policy Data European Union (EU) Global Tax Maps
