BUSINESS

Banks want tax deferred for 20 years

YIANNIS PAPADOYIANNIS

TAGS: Banking

Greek banks are asking for the immediate extension of the deferred tax period for offsetting losses from bad loans to 20 years, in order to deal with the problem without needing extra capital injections.

Existing legislation allows for the offsetting of losses for five years, but banks warn that unless this is stretched to many more years they will have to add multi-billion-euro losses to their financial reports that would require another recapitalization process.

The change to the taxation system for dealing with nonperforming loans has already been agreed following intensive work by the Bank of Greece, with commercial lenders asking for the offsetting application to reach up to 20 years, while authorities insist this cannot go anywhere beyond 15 years.

Bank officials tell Kathimerini that the offsetting period will have to be long enough for banks to achieve the necessary profits so as to match their losses with the taxes due.

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