The Total Tax Rate of Credit Entities Adhered to CECA Reached 41% in 2017
For every 100 euros of profit before taxes, 41 euros were directly allocated to tax payments.
The savings banks and banks created by the savings banks made a tax contribution of 4,837 million euros in 2017, of which 2,287 million euros correspond to borne taxes, meaning those that represent a cost to the entities and affect their results, and 2,550 million euros to collected taxes, meaning those that are withheld or passed on to third parties.
Thus indicates the study conducted by CECA in collaboration with PwC for the second consecutive year, which also shows that the most significant borne taxes were those related to employment (1,010 million euros), non-deductible VAT, which presents a cost to financial entities (682 million euros), the asset benefit from tax credits (247 million euros), and the Bank Deposits Tax (152 million euros).
The entities adhered to CECA represent, in terms of GDP, 41% of the financial services sector and are characterized by developing almost entirely their activity in Spain. Hence, the importance of the contribution through taxes from the CECA Sector.
Regarding the possible establishment of new taxes on the financial sector to increase revenue and finance the rise in pensions, the association believes that taxing a specific sector is not the solution, especially considering the contribution that the sector already makes and the potential collateral effects that a higher tax burden may have on the Spanish economy as a whole, in terms of wealth, employment, and investment.
The PwC study has also estimated the indirect and induced impacts primarily resulting from the granting of credit to both businesses and Spanish households. In this sense, the financial activity of the entities adhered to CECA translates into greater economic activity and consumption and has contributed in 2017 to generating 11.8% of national tax revenue (mainly from taxes associated with employment – Social Security contributions and personal income tax). This impact on tax revenue corresponds to a significant portion of national spending on pensions.
