Italy to raise more than 5 bln euros over next three years from banks, insurers (updated)

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23/10/2024 14:52

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      Banks seen contributing 3.6 bln euros, insurers 1.75 bln 
    

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      Measures involve use of deferred tax assets
    

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      State-owned Monte Paschi di Siena particularly affected
    

  
 (Adds details from document and background throughout)
    By Giuseppe Fonte and Valentina Za
       ROME, Oct 23 (Reuters) - Italy expects to raise about
5.4 billion euros ($5.82 billion) over the next three years from
banks and insurers through a package of measures envisaged in
Rome's 2025 budget, a government document seen by Reuters showed
on Wednesday.
    The Treasury had previously said that the financial sector
would contribute 3.5 billion to Italy's budget.
    Italian banks will temporarily face higher taxes on profits
as the government intends to force lenders to spread tax
deductions stemming from past losses for up to four years.
    The move, including other minor tax measures, is expected to
result in a contribution from banks to Italy's strained state
finances worth 3.6 billion euros in the 2025-2027 period, the
document said.
    Talk of a new levy weighing on the financial sector had
swirled for weeks and weighed on lenders' shares in the absence
of clarity from the government. Economy Minister Giancarlo
Giorgetti has said a contribution from banks "shouldn't be
considered blasphemous."
    Under the budget, banks will have to use 2025 tax credits,
known as deferred tax assets or DTAs, to lower their taxes over
four years between 2026 and 2029, while the use of DTAs related
to 2026 will be spread over the following three years.
    Italy's largest banks include Intesa Sanpaolo  ISP.MI ,
UniCredit  CRDI.MI , Banco BPM  BAMI.MI  and state-owned Monte
dei Paschi di Siena  BMPS.MI .
    The measure is particularly relevant for MPS, which has
significant DTAs on its balance after years of steep losses and
had started reaping benefits now that it's once again
profitable.
    Italy's Treasury needs to cede control of MPS by the end of
this year to meet re-privatisation terms agreed with the
European Union at the time of a costly 2017 bailout, people have
previously said.
    The government also expects to collect 1.75 billion euros
over the next three years from insurers by changing in the
budget the payment terms of stamp duties for some insurance
policies.
    As things stand, the stamp duty gets calculated every year
but gets paid by investors when they cash in on the policies.
    The government however is asking insurers to pay upfront and
then get it back at the end of the contract from their clients
starting from next year.
    Moreover, insurers must pay by June 30, 2025 half of stamp
duties owed up to 2024 on existing contracts. Another 20% is due
by June 30, 2026. A further 20% by mid-2027 and the remaining
10% by mid-2028.
    Italy last year shocked markets by imposing a 40% tax on
banks' windfall profits, only to backtrack by limiting the scope
of the levy and giving lenders an opt-out clause which meant
that in the end it raised zero for state coffers.
    ($1 = 0.9286 euros)

 (Reporting by Giuseppe Fonte and Valentina Za; Editing by
Sharon Singleton and Alexandra Hudson)
 ((giuseppe.fonte@thomsonreuters.com; +390680307711;))