A bank, neobank, payment institution, e-money institution, or regulated financial holding company asks about accounting, regulatory capital, or tax issues specific to financial institutions.
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General reference only
This Guide is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for your personal facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.
Source-cited draft. This Guide is source-cited but has not been reviewed by a licensed practitioner. It may be incomplete, outdated, or wrong.
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UK Bank Levy — standard rate
0.10% of taxable balance sheet equity and liabilitiesFinance Act 2011 Schedule 19
UK Bank Levy — prior standard rate (before reduction)
0.21%Finance Act 2017
UK Bank Levy — half rate on long-term funding
0.05%Finance Act 2011 Schedule 19
UK Bank Levy — de minimis balance sheet threshold
GBP 20bnFinance Act 2011 Schedule 19
UK Bank Levy return — due date
9 months and 1 day after period endFinance Act 2011 Schedule 19
UK Bank Corporation Tax Surcharge — current rate
3% on bank profits above GBP 100mFinance Act 2015 s.17, amended Finance Act 2022
UK Bank Corporation Tax Surcharge — prior rate
8%Finance Act 2015 s.17
UK Bank Corporation Tax Surcharge — profits threshold
GBP 100mFinance Act 2015 s.17, amended Finance Act 2022
UK standard Corporation Tax rate (applicable to banks above surcharge threshold)
25%Finance Act 2021
UK effective CT rate on banking profits above GBP 100m threshold
28% (25% standard CT + 3% surcharge)Finance Act 2015 s.17, amended Finance Act 2022
UK Bank Levy — scope (also stated in Section 1)
0.10% of taxable bank balance sheet equity and liabilitiesFinance Act 2011 Schedule 19
SRF target level at maturity
1% of covered depositsRegulation (EU) 806/2014
Italy — Imposta straordinaria 2023 rate on certain net interest gains
40%Italian extraordinary bank tax (2023)
Italy — Imposta straordinaria 2023 base
Net interest income excessItalian extraordinary bank tax (2023)
Spain — extraordinary windfall bank tax rate
4.8% on net interest + commissionsSpanish extraordinary bank levy (2023–2025)
Spain — extraordinary bank tax threshold
Spanish-source banking gross income > EUR 800mSpanish extraordinary bank levy (2023–2025)
Spain — extraordinary bank tax applicable period
2023–2025Spanish extraordinary bank levy (2023–2025)
Hungary — bank levy rate (lower threshold)
0.15%Hungarian bank levy legislation
Hungary — bank levy rate (higher threshold)
0.20%Hungarian bank levy legislation
Hungary — bank levy base
LiabilitiesHungarian bank levy legislation
Sweden — bank tax rate (prior to 2024 reduction)
6% on liabilitiesSwedish bank tax legislation
Sweden — bank tax rate change
Reduced in 2024Swedish bank tax legislation
Netherlands — Bankenbelasting rate on short-term liabilities
0.044%Wet bankenbelasting (Netherlands)
Netherlands — Bankenbelasting rate on long-term liabilities
0.022%Wet bankenbelasting (Netherlands)
Poland — bank levy rate per month
0.0366% per monthPolish bank levy legislation (ustawa o podatku od niektórych instytucji finansowych)
Poland — bank levy annual equivalent rate
0.44% annuallyPolish bank levy legislation (ustawa o podatku od niektórych instytucji finansowych)
Poland — bank levy asset threshold
Excess assets above PLN 4bnPolish bank levy legislation (ustawa o podatku od niektórych instytucji finansowych)
US — loan loss reserve deductibility threshold (small banks)
Assets ≤ USD 500mInternal Revenue Code §585
US — non-thrift bank loan loss deduction method
Specific charge-off method onlyInternal Revenue Code §166
Italy — banking sector loan loss provisions deductible in year 1 (historical schedule)
18% of book value in year 1Italian IRES banking sector rules
Basel III CET1 deduction threshold — DTAs relying on future profitability
10% threshold (combined with other deductions) before CET1 deduction requiredCRR Article 36(1)(c)
Pillar Two minimum ETR rate — threshold for DTA/DTL revaluation
15%OECD Pillar Two GloBE Model Rules (pillar-two-globe-minimum-tax.md)
Pillar Two — DTL recapture rule period
5-year DTL recapture ruleOECD Pillar Two GloBE Model Rules (pillar-two-globe-minimum-tax.md)
UK — trading book tax treatment
Mark-to-market gains taxableFinance Act 2002 Schedule 26
US — trading book mark-to-market election for dealers
Mark-to-market election availableInternal Revenue Code §475
EU DGS legal basis
Ex-ante and ex-post contributions from member banksEU Directive 2014/49/EU
A sector overlay for banks, neobanks, payment institutions, e-money institutions, and regulated financial holding companies. Loads alongside the country corporate income tax skill and addresses bank-specific items.
This skill covers:
This skill does NOT cover:
Detailed Basel III/IV calibration beyond high-level connections
Day-to-day VAT on financial services (see country VAT skills with banking carve-outs)
MiFID / consumer protection compliance
Anti-money-laundering operational compliance
CRD/CRR/PRA specific reporting
UK Bank Levy rate reference — 0.10% of taxable bank balance sheet equity and liabilities (UK Bank Levy (Finance Act 2011 Sch 19))
UK Bank Corporation Tax Surcharge reference — 3% additional CT on bank profits above GBP 100m (reduced to 3% from 8% in April 2023) (UK Bank Corporation Tax Surcharge)
[T1] See ifrs-local-gaap-reconciliation.md for the underlying difference catalogue.
For banking specifically:
IFRS 9 vs ASC 326 (CECL) comparison ([T1])
| Item | IFRS 9 | ASC 326 (CECL) |
|---|---|---|
| Loss model | 3-stage Expected Credit Loss | Current Expected Credit Loss — lifetime ECL from inception |
| Day-1 allowance | 12-month ECL only | Lifetime ECL (typically higher) |
| Significant increase in credit risk (SICR) | Threshold (typically 30-day past due rebuttable presumption + qualitative) | n/a in CECL but used for monitoring |
| Originated credit-impaired (POCI) | Effective interest rate based on lifetime expected cash flows; subsequent ECL changes through P&L | ASU 2022-02 conformed POCI treatment |
| Off-balance-sheet (loan commitments, financial guarantees) | Stage-based ECL | CECL |
[T1] By jurisdiction (sample):
Tax treatment of loan loss provisions by jurisdiction ([T1])
| Country | Treatment |
|---|---|
| US | Loan loss reserve deductible only for small banks (assets ≤ USD 500m) under §585; non-thrift banks use specific charge-off method (§166). ASC 326 CECL accounting does not flow through 1:1 to tax. |
| UK | General provisions not deductible; specific provisions deductible if linked to identifiable loss event and meets HMRC commercial test. IFRS 9 Stage 3 generally deductible; Stages 1/2 generally not |
| Germany | Allgemeine Risikovorsorge limited; spezifische Wertberichtigungen deductible when "objectively required" — pre-tax overlay |
| France | Provisions pour dépréciation generally deductible if probable and quantifiable |
| Italy | Banking sector loan loss provisions deductible on schedule (18% of book in year 1 historically; now reformed to align IRES treatment) |
| Australia | Specific loss provisions deductible; general not |
| Canada | Specific allowance deductible; general allowance non-deductible |
| India | Specific provisions allowed only to extent prescribed by RBI; bad-debt write-offs deductible |
EU Member State bank levies
| Country | Rate | Base |
|---|---|---|
| Germany | EUR 410-1.6bn annually distributed across banks | Risk-weighted liabilities — Bankenabgabe |
| France | Contribution sur les établissements de crédit reformed; merged into SRF + national supplement | Risk-weighted exposures |
| Italy | Imposta straordinaria 2023 (40% on certain net interest gains) — converted to optional reserve contribution following ECB pushback | Net interest income excess |
| Spain | 4.8% on net interest + commissions (extraordinary 2023-2025; targeted "windfall" tax) | Spanish-source banking gross income > EUR 800m threshold |
| Hungary | Bank levy — 0.15% / 0.20% balance sheet thresholds | Liabilities |
| Sweden | Bank tax — 6% on liabilities; reduced 2024 | Total liabilities |
| Belgium | Bank levy on liabilities | Liabilities |
| Netherlands | Bankenbelasting — 0.044% short-term / 0.022% long-term liabilities | Liabilities |
| Poland | Bank levy 0.0366% per month (0.44% annually) | Excess assets above PLN 4bn threshold |
[T1] Banks typically hold material DTAs from:
IFRS 9 ECL (book in advance of tax)
Pension obligations (book provisions in advance of tax)
Deferred compensation
Operating loss carryforwards
Securitisation losses
Basel III prudential filter CET1 deduction threshold — 10% percent (combined with other deductions) (DTAs that rely on future profitability must be deducted from CET1 above this threshold; DTAs from temporary differences taxed at deferred 15%+ generally less restrictive) (Article 36(1)(c) CRR [T1])
Pillar Two interaction — DTAs / DTLs revalued to lower of statutory rate or 15% (per pillar-two-globe-minimum-tax.md); 5-year DTL recapture rule may add back loan loss DTL recoveries; ETR may fall below 15% for banks with material loss carryforwards in low-rate jurisdictions. (pillar-two-globe-minimum-tax.md [T2])
Card interchange revenue is service revenue subject to standard CIT. Merchant discount rate (MDR) flows to processor / bank. Specific country VAT exemptions for "financial services" generally cover interchange.
Tax treatment varies — some jurisdictions allow deduction of CVA P&L volatility; others require add-back of fair value losses on counterparty risk.
This skill produces working papers for review by credentialed banking-sector practitioners. Bank accounting, regulation, and tax are highly specialised. Every output must be reviewed and signed off by a credentialed practitioner (typically Big 4 banking sector specialist, in-house Head of Tax, or audit partner) before any filing or capital reporting.
The most up-to-date, verified version of this skill is maintained at openaccountants.com.
This skill is a tool, not an engagement. Every taxpayer's situation is different, and the rules in the skill may not match your specific facts.
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Other GLOBAL computations in the OpenAccountants Tax Library.
Rendered from the facts database. General reference only — confirm with a qualified professional before acting.
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