Banks got €459 million in deferred taxes

Tax payers’ subsidies to Portugal’s banking system reflected in deferred taxes had a €459 million negative impact on the public finances in 2022.

The Deferred Tax Asset (DTA) is a mechanism that gives the banks a tax credit. The information was revealed in an excessive debt report sent by the Portuguese statistics institute (INE) to Brussels.
“On the expenses side, there were amounts associated with the conversion in tax credits of deferred tax assets” states the Bank of Portugal. But interest on the debt contracted to meet current and past operations also had to be taken into account, and it is here that the amount topped €635 million, reaching the highest value since these operations have been reported to the EU statistics body Eurostat. Capital transfers of €246 million were bundled into this debt parcel. A total of €882 million was disbursed.
On the receipts side, the Bank of Portugal refers to the “impact of State bank CGD dividends”. In this case €381 million went into State coffers in 2022. There was also €32 million from other non specified revenues. All told there was €423 million in receipts. Subtracting €882 million in receipts, the final accounts had an impact of €459 million.

Photo: Pedro Sarmento Costa, Lusa.