Banks may adhere to the system of tax credits from … – Economic

Banks may adhere to the system of tax credits from … – Economic

Lusa

12:29

From fourth -Thurs banks may join the special regime that allows them to transform into tax credits deferred taxes originated by credit impairments and the benefits granted to employees, a move long demanded by the industry.

It was published today in Gazette special rules applicable to deferred tax assets, which was several months ago asked by banks complained that the same treatment already given to banks in Spain and Italy.

Due to new accounting rules of Basel III, banks are now required to deduct from own funds the deferred tax assets that were accumulated, can only count as capital those in which there is almost full guarantee of their use. This mean a ‘hole’ in banks’ capital ratios, at the time preparing for the tests of ‘stress’ of the European Central Bank (ECB).

The regime published today grants this tax credit to banks. But requires that, when the want to use, constitute a special reserve to be incorporated into the capital and at the same time, assign to the state conversion rights amounting to 110% of credit used, which may be exercised and converted into shares ( State with the power to become a shareholder in this way) or sold in the market.

To enter this regime, banks have to make application to join the Minister of Finance and approve the accession in assembly -Overall.

When was debated in Parliament, the opposition questioned the government about the costs to the public accounts of this scheme, since the state must assume the debt as tax credits that grant. However, Finance Minister, Maria Luís Albuquerque, minimized this effect in future budget deficits, justifying it with the “compensation mechanism [that the regime has] that avoids the possible impact on the budget,” but declined to estimate the impact the measure.

The official said that for the deferred tax assets are converted into tax credits, it is necessary that companies have losses, so considered that this scheme could have “very negative impact” public accounts would take “many consecutive years of losses of companies” and that if the banks return to positive results “to all appearances”, “nothing changes against the current regime.” Besides, he added, as the new regime starts counting from 2015, so “its effects will impact only in 2016.”

In the major banks, it is estimated that there are about 1, EUR 5 billion of deferred taxes that can be transformed into tax credits. The BCP will be the biggest beneficiary.

In an opinion on this issue, the Bank of Portugal considered that the obligation of banks give compensation to the State will to accede to this scheme only those who “present a substantive and immediate need to strengthen capital and simultaneously presenting greater difficulty in accessing capital markets to meet this very need.”

the banking supervisor, will make it “the institutions in worse financial conditions, and therefore more urgent needs to attract new shareholders, which will be more penalized.”

ie say

Banks perform a set of operations whose value at a certain point, although accepted accounting purposes, is not accepted for the purposes of the tax authorities. It is the value that goes above the amount accepted by the tax authorities that generates the deferred tax asset and that is in the bank’s balance sheet to reduce further tax to pay.