Deferred tax amendments may save up to 3 bln for banks

The Finance Ministry is expected to present Parliament by the end of the week with a series of amendments to a law for the acknowledgement of the deferred tax assets of banks, while officials of the country’s four systemic banks were on Tuesday in Frankfurt to meet with European Central Bank officers and discuss this issue along with the upcoming stress test results.

Government sources said that the legislation on the deferred tax credits will be adjusted to the demands of the European Bank Authority (EBA). It will be amended to reduce the period during which banks will be allowed to offset taxes with losses (by the state debt restructuring and the bad loans) from the law’s provision for 30 years. It will also impose the payment of the guarantee in cash instead of bonds.

That way the government aspires to secure an indirect capital strengthening of local lenders by 2 to 3 billion euros ahead of the stress tests, thereby increasing the chances that the capital reserves of the Hellenic Financial Stability Fund (HFSF), amounting to 11 billion euros, will not be used after all and be returned to the country’s creditors in order to reduce the state debt.

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