An amendment tabled on Wednesday in the Greek Parliament will likely offer local banks a safety cushion of 3 billion euros, thanks to the authorities’ acknowledgement of deferred tax assets in a clause that also concerns leasing and factoring companies.
While the regulation changes nothing in the tax treatment of banks and the recognition of deferred tax requirements as determined following the PSI debt restructuring in 2012, the state is now undertaking the obligation to pay the deferred tax in case the banks do not present any profits in the next 30 years.
The state guarantee is necessary for the European Central Bank to acknowledge this amount in its surveying process, adding to the banks’ capital bases ahead of their stress tests. In practice the recognition of the deferred tax will not burden the state debt, unless banks show no profits, in which case the state will need to cover their tax obligations.
Bank officials told Kathimerini that the recognition of the deferred tax assets boosts the chances of banks passing their stress tests but, as one of them pointed out, until the European Banking Authority approves the regulation, “we cannot know precisely how the transformation of the deferred tax to capital will be handled.”