Press Release: State aid: Commission opens formal investigation into Italy’s tax incentive to recognise hidden gains of privatised banks

The European Commission has opened under EC Treaty state aid rules a formal investigation into the provision of Italy’s 2004 Finance Law that allows former state-owned banks to release hidden capital gained during their corporate restructuring in the 1990s by paying a nominal tax of 9% in lieu of the ordinary company tax of 37.25%. The amount of gains recognised totals over €2 billion among the nine banks which decided to use the system. The difference between the tax ordinarily payable and the tax actually paid amounts to over €586 million. The Commission is concerned that the release of the gains may unduly affect the ongoing consolidation process of bank conglomerates in the EU, without contributing to economic development to any significant extent. The investigation will allow interested parties to comment on the measures under scrutiny. It does not prejudge the Commission’s final decision.