Bad news for the Spanish bank in its crusade against the ‘tax’. Ana Botín will hand over the baton at the head of the European banking association in february, coinciding with the start of the legal battle that the sector is preparing against Pedro Sánchez’s plan. That same month the banks will have to make the first payment of the new tax, which has just been approved by Parliament, almost unchanged in its original version in the face of warnings from the European Central Bank (ECB).
Botín will fulfill her two-year term as president of the European Banking Federation (EBF). Christian Sewing, CEO of Deutsche Bank, will take over from the president of Banco Santander. This position is traditionally held by an active executive of one of the large European banks and rotates for two years. It is a position key in dialogue with Brussels to expose the doubts and claims of the entities.
Without going any further, Botín took advantage of his influence within the banking employers’ association so that the ‘tax’ will cross the borders of Spain in the middle of August and before the forceful opinion of the ECBwhich seemed key to forcing a change in the government plan.
the EBF issued a harsh statement endorsing the arguments of the country’s main bankers, although the message was measured very well and no direct reference was made to Spain.
“Initiatives emerging in some European countries to impose ad hoc taxes on banks are unjustified, discriminatory and, most importantly, they fail to address the cost of living crisis,” warned the European banking association. An argument that replied to the one exposed a few days before by Gonzalo Gortázar, CEO of CaixaBank, who described the new rate as “unfair, distorting and counterproductive”.
More combative than the AEB and CECA
The statement from the European Banking Federation was even more forceful than the one agreed by the national employers’ associations AEB and CECA, and appealed to the sole supervisor to endorse that there were precedents, such as that of Lithuania, in which a comprehensive review on the impact on the profitability of the sector and the ability to finance the economy.
The legal teams of the banks will fight at the beginning of 2023. The tax of 4.8% of the income of the typical business and of the commissions for the sale of financial products aims to collect around 3,000 million between 2023 and 2024. Bankinter has already announced that it will appeal the tax with the first payment and it is expected that other banks such as Ibercaja, CaixaBank, BBVA and Santander will join the battle.
The bankers are convinced that they will overturn the tax in court because there is double taxation and it distorts competition inside and outside of Spain, as the supervisor himself warned”
Each entity must explore the judicial route separately and could only start it from February. That is the date set by the bill of government partners that the Senate has just approved to a first installment payment of 50%.
The tax declaration will be made in September 2023 and 2024, with which the bank will have to make four payments for the new tax each of those years (in February and September). The plan would involve challenging the new rate in the National Court, with an appeal to the Contentious-Administrative Chamber.
The bankers are convinced that there is a double taxation and that the new tax contravenes the principles of equality and non-discrimination enshrined in the Spanish Constitution. In this sense, they will use the opinion of the ECB, which is not binding, to build their legal defense, such as the risk of “falsifying” competition both within Spain and within the European Banking Union.