The Tax Burden on Banks Over the Period 2006-2014

45 Pages Posted: 18 Apr 2016

Date Written: February 25, 2016

Abstract

Following the establishment of the Single Supervisory Mechanism (SSM), concerns about having a level playing field become more important due to the heterogeneity in bank taxation rules across Europe: measuring the tax burden can provide a first rough measure of the extent of heterogeneity across countries. After a review of the main differences in banks taxation between Italy, France, Germany, Spain and the UK, the paper provides estimates for the tax burden and deferred tax assets in these countries over the years 2006-2014; the impact of differences in taxation on bank profitability is also examined. Moreover, the paper carries out a more in-depth analysis of Italian banks by considering both individual balance sheet data and aggregate tax return data. The impact of tax measures on financial stability and on profitability is further analysed. The comparative analysis points to a wide heterogeneity across countries in the tax treatment of the banking sector. This suggests that it would be advantageous to explore possible ways to make the tax systems of the countries participating in the SSM more homogeneous; a first step could be to harmonize tax bases.

Keywords: banking, taxation

JEL Classification: G21, H25, H87, K34

Suggested Citation

Ricotti, Giacomo and Burroni, Marco and Cuciniello, Vincenzo and Padovani, Elena and Pisano, Elena and Zotteri, Stefania, The Tax Burden on Banks Over the Period 2006-2014 (February 25, 2016). Bank of Italy Occasional Paper No. 314. Available at SSRN: https://ssrn.com/abstract=2765420 or http://dx.doi.org/10.2139/ssrn.2765420

Giacomo Ricotti

Bank of Italy ( email )

Via Nazionale 91
VIa Pastrengo 14
Rome, 00184
Italy

Marco Burroni

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Vincenzo Cuciniello (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Elena Padovani

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Elena Pisano

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Stefania Zotteri

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
41
Abstract Views
398
PlumX Metrics