Austria To Rein In Bank Tax
The Austrian Government has proposed reducing the burden of the nation’s banking levy and calculating it based on a bank’s earnings rather than assets.
The change was confirmed recently by Finance Minister Hans Jörg Schelling, who said that cutting Austria’s bank levy, currently the highest in Europe, and aligning it more closely with the bank tax regime in place in Germany, would increase the country’s competitiveness and move Austria “back to the top.”
Under Austria’s bank levy, introduced in January 1, 2011, banks are taxed at 0.9 percent on balance sheets between EUR1bn (USD1.1bn) and EUR20bn, and at 0.11 percent on balance sheets in excess of EUR20bn. There is also a surtax of 25 percent of the initial tax rate of 0.055 percent tax rate, which applied prior to April 1, 2014.
While details of the new regime have yet to be finalized, the Government said banks will see their annual bank levy payments fall to EUR100m annually from EUR550m at present. However, Austria’s banks will also have to make a collective one-off EUR1bn contribution to the state budget, with these funds earmarked for the education sector. Details of this contribution also need to be worked out.
The revised bank levy would apply from January 2017.
“Banks will now make a one-time advance payment and we will essentially change over to the German model, which is based on profits instead of total assets,” Schelling said. “This will make the banks competitive again.”
Source: Tax News
