Latest from Italy – New tax on extra profits of banks

At the current state, the above-mentioned law-decree is not yet published, so there is no official text of the rule for the time being. However, the press release of the Italian Government includes a brief description of the newly introduced tax, which is reported below: 

"In dependence of the trend in interest rates and the social impact resulting from the increase in mortgage repayments, the decree establishes, for the year 2023, an extraordinary tax to be paid by financial intermediaries, excluding mutual fund management companies (SGR) and securities brokerage companies referred to in the Consolidated Law on Financial Intermediation (Legislative Decree No. 58 of February 24,1998). The extraordinary tax is determined by applying a rate of 40 percent on the greater value between: 

• the amount of the net interest margin referred to item 30) of the profit and loss account, prepared in accordance with the formats approved by Bank of Italy, relating to the fiscal year prior to the fiscal year in progress as of January 1, 2023 that exceeds the same margin in the fiscal year prior to the fiscal year in progress as of January 1, 2022 by at least 5 percent; 

• the amount of the net interest margin referred to item 30) of the profit and loss account, prepared in accordance with the formats approved by Bank of Italy, relating to the fiscal year prior to the fiscal year current on January 1, 2024 that exceeds the same margin in the fiscal year prior to the fiscal year current on January 1, 2022 by at least 10 percent. 

The extraordinary tax will be paid during 2024 and will not be deductible for IRES and IRAP purposes." 

On 8 August, the Ministry of Economy released a note setting a ceiling for the contribution that cannot exceed 0.1% of total assets of the balance sheet.