Tax Pressure on Italian Banks: Profits and Taxes in 2023

In 2023, Italian banks paid 8.1 billion euros in taxes on 40.6 billion euros in profits, with a tax rate of 20.1%.

Profits and Tax Pressure of Italian Banks in 2023

The tax pressure for Italian banks was termed “paradisiacal” in 2023. Credit institutions collectively generated 40.6 billion euros in profits, paying only 8.1 billion euros in taxes. This resulted in a tax rate of 20.1%, significantly lower than the average for Italian businesses and workers, which exceeds 42%.

Performance of the Banking Sector from 2018 to 2023

An analysis by Unimpresa’s Center for Studies, based on Bank of Italy data, reveals that from 2018 to 2023, Italian banks paid a total of 22.6 billion euros in taxes. During this period, the banking sector generated revenues of 516.2 billion euros, with total profits of 115.6 billion euros. The annual average revenue was 86.1 billion euros, with profits of 19.2 billion euros and taxes paid amounting to 3.7 billion euros, corresponding to 19.6% of the profits.

Detailed Analysis of Annual Results

In 2023, thanks to the increase in the cost of money decided by the European Central Bank, bank revenues reached 102.6 billion euros, with 62.1 billion coming from the interest margin. Taxes paid amounted to 8.1 billion euros, corresponding to 20.1% of the profits. Similarly, 2022 was a positive year, with revenues of 88.1 billion euros and taxes paid equivalent to 17.1% of the profits. Conversely, 2020, marked by the Covid-19 pandemic, saw a reduction in profits and an increase in the tax rate to 61.5%.

Conclusions and Future Outlook

Unimpresa President Giovanna Ferrara commented that the banking sector will continue to benefit from monetary policy and loan profits in 2024. The proposal for a windfall tax on bank profits is seen as a measure of social equity, necessary to redistribute wealth produced in the country. However, it is crucial for the government to adopt a clear line to avoid confusion in financial markets.