EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 14 July 2009  
on the taxation of the Banca d’Italia’s gold reserves 
(CON/2009/59) 
 
Introduction and legal basis  
On 26 June 2009 the European Central Bank (ECB) received a letter from the Italian Minister for 
Economic Affairs and Finance informing the ECB that  on the same day an important package of legal 
provisions would be approved by the Council of Ministers, containing measures aimed inter alia  at 
finding the necessary resources to redress the current public finance situation (Decree-Law No 78 of 
1 July 2009 containing measures on the crisis and pr orogation terms and on the Italian participation in 
international missions1, hereinafter the ‘Decree-Law’ ). The Italian Minister brought the ECB’s attention 
to the fact that Article 14 of this Decree-Law relates to the Banca d’Italia. The Decree-Law was subsequently presented to the Parliament for discussion  and conversion into law within 60 days following 
publication in the Gazzetta Ufficiale della Repubblica Italiana  (GU). The subject of this opinion is Article 
14 of the Decree-Law as published in the GU and pre sented for discussion to the Parliament (hereinafter 
the ‘draft article’), which is different in some elemen ts from the text attached to the abovementioned letter 
from the Minister. 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the third indent of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 
on the consultation of the European Central Bank by  national authorities regarding draft legislative 
provisions
2, as the draft article relates to the Banca d’It alia. In accordance with the first sentence of 
Article 17.5 of the Rules of Procedure of the Eur opean Central Bank, the Governing Council has adopted 
this opinion. 
                                                 
1  Gazzetta Ufficiale della  Repubblica Italiana  No 150, 1.7.2009, p. 1. 
2  OJ L 189, 3.7.1998, p. 42.  
2 1.  Purpose of the Decree-Law 
While the Decree-Law has the very broad intention of increasing resources available to the State budget 
in the present financial conditions3, the draft article under assessment in this opinion specifically provides 
for a substitute tax of 6% on capital gains registered  in the balance sheet ge nerated from the price 
evaluation of stocks of precious metals for non-industrial use4. The ECB understands that the tax would 
apply also to the Banca d’Italia’s entire holdings of gold5, with the exception of the rate of gold stocks 
which the Banca d’Italia has conferred ‘in fulfilmen t of obligations deriving from membership of the 
European Communities’6. The ECB further understands that the econom ic benefit expected to be received 
by the State budget from the new tax would mainly be produced by payments to be made by the Banca 
d’Italia. 
 2.  General observations 2.1 Compliance with the consultation obligation 
 The ECB received the Minister’s letter on 26 J une 2009, the day on which the Italian Council of 
Ministers approved the version of the Decree-Law subsequently sent to the Parliament. In this 
respect, the ECB notes that Article 2(1) of Decision 98/415/EC requires national authorities to consult the ECB on draft legislative provisions con cerning matters that fall within its competence. 
This applies in particular to the Decree-Law, sin ce the draft article imposes financial obligations on 
the Banca d’Italia and therefore constitutes a draft legislative provision concerning a national 
central bank (NCB), on which the ECB must be cons ulted in accordance with the third indent of 
Article 2(1) of Decision 98/415/EC. This consultati on obligation is not affected by the manner in 
which the draft article defines its addressees in ge neral terms as holders of precious metals for non-
industrial purposes. The ECB understands in this cont ext that the Banca d’Italia will be the main 
entity affected by the proposed taxation and w ill bear a major part of the newly created tax 
obligations.  
 The ECB considers that the draft article is not cl ear and raises concerns from the perspective of its 
compliance with Community law. The ECB tr usts that its comments will be given due 
                                                 
3  The letter from the Minister for Economic Affairs and Fina nce refers to emergency fina ncial needs resulting from a 
recent earthquake in the Aquila province, while the Decree-Law provides for several crisis measures, as well as for other 
measures involving current expenditure, and states that the income of the new ta x will be one of the financial sources 
used to cover the decrease in income and increase in expendi ture arising from these measures (see Article 16(1)(a) of the 
Decree-Law). 
4  Paragraph 1 of the draft article.  
5  On the Banca d’Italia’s subjection to ta xation, see: (i) Article 73 of Decree of  the President of the Republic No 917 of 
22 December 1986, Gazzetta Ufficiale della Repubblica Italiana , S.O., No 302, 31.12.1986 (the Consolidated Law on 
Income Tax, the TUIR), as amended, rela ting to the entities subject to corporate in come tax; (ii) Article 114 of TUIR, as 
amended, specifically relating to the dete rmination of the Banca d’Italia’s income ; (iii) Article 3 and Article 6(7) of 
Legislative Decree No 446 of 15 December 1997, Gazzetta Ufficiale della Repubblica Italiana , S.O., No 298, 
23.12.1997) on regional tax on productive activities, as amende d. As regards the identification of precious metals, 
including gold, see Article 1 of Legisl ative Decree No 251 of 22 May 1999, in Gazzetta Ufficiale della Repubblica 
Italiana  No 180, 3.8.1999, as referred to in the draft article. 
6  Paragraph 1 of the draft article. 
3 consideration by the Italian authorities and that th e Italian Government will consult the ECB at an 
appropriate point in time on an am ended version. Moreover, the E CB notes that Article 3(4) and 
Article 4 of Decision 98/415/EC require Member States to suspend the process of adoption of the draft legislative provision pending receipt of the ECB’s opinion. 
2.2 Treaty limitations for financial tr ansfers by NCBs to the State budget 
 The taxation provisions of the draft article would r esult in transfers of some of the Banca d’Italia’s 
financial resources to the State budget. Any such transfers of financial resources by an NCB to a 
Member State’s budget, either in the form of a pr ofit distribution scheme or in any equivalent form, 
need to comply with the limitations imposed in this  respect by the Treaty, and in particular with the 
principle of central bank independence under Artic le 108 and with the prohibition on monetary 
financing in Article 101(1)
7. Previous ECB opinions have clarified their implications8 and can be 
summarised as follows. 
(a)  Compliance with the central bank independence principle  National legal provisions, and in particul ar NCB statutes, normally prescribe how NCB 
profits are to be allocated. In the absence of  such provisions, the decision on allocation of 
profits should be taken by the NCB’s decision- making bodies, and should not be subject to 
the discretion of third parties unless there is an  express safeguard clause stating that this is 
without prejudice to the financial means necess ary for carrying out the NCB’s tasks related 
to the European System of Central Banks (ESCB)
9. Moreover, compliance with the principle 
of central bank independence under Article 108 of the Treaty includes a requirement to ensure the central bank’s financial independen ce. To ensure such compliance, the Member 
States should establish legal frameworks for N CB profit distributions which allow for an 
arm’s length assessment of the financial needs of the respective NCB to be appropriately taken into account. Such assessments should be  based on the professional judgement of the 
relevant NCB’s independent decision-making body rather than on the financial needs of the 
State, so that the NCB does not become depe ndent for its finances on the Government, the 
Parliament or any other third party
10. The principle of central bank independence requires 
that no third party should be able to exercise direct or indirect influence, not only over the performance of the NCB’s tasks, but also ove r its ability, both operationally in terms of 
manpower, and financially in terms of appropria te financial resources, to fulfil its mandate
11, 
i.e. to perform their national tasks, to meet their international obligations and properly cover 
                                                 
7  As also reflected respectively in Article 7 and Article 21.1 of  the Statute of the European System of Central Banks and of 
the European Central Bank (hereinafter the ‘ESCB Statute’). 
8  See, e.g. paragraph 6 of ECB Opinion CON/99/16, paragr aphs 3.2 and 3.3 of ECB Opinion CON/2008/82, paragraphs 2.2 
and 2.4 of ECB Opinion CON/2009/53 and fu rther opinions quoted in the footnotes below. See also ECB’s Convergence 
Report December 2006, pp. 27-30; ECB’s Convergence Report May 2007, pp. 19-23; ECB’s Convergence Report May 
2008, pp. 20-25. All documents available on the ECB’s website at www.ecb.europa.eu. 
9  See paragraph 2.3 of ECB Opinion CON/2009/26 and the ECB’s Convergence Report May 2008, p. 20. 
10  See, e.g. paragraph 8 of ECB Opinion CON/2003/ 22 and paragraph 3.3 of ECB Opinion CON/2009/53. 
11  See, e.g. paragraph 2.2 of Opini on CON/2008/9, paragraph 3.3.1 of Opini on CON/2008/10, paragraph 3.3 of Opinion 
CON/2008/20 and the ECB’s Convergence Report May 2008, pp. 20-21. 
4 their administrative and operational expenses12. Having sufficient financial means ensures 
that the central bank will always and in all ci rcumstances have at its disposal the necessary 
resources to conduct monetary policy. Indeed, it is  of utmost importance to allow a sufficient 
provision of reserves during years of profits to  allow the central bank to face possible losses 
without weakening its financial means to impl ement its monetary policy. Similarly, as 
regards financial provisions or buffers, the N CB must also be free to independently create 
financial provisions to safeguard th e real value of its capital and assets13. Furthermore, 
Articles 28.1 and 30.4 of the Statute of the ESCB provide for calls on the NCBs to make contributions to the capital of the ECB and to make transfers of foreign reserves. The principle of financial indepe ndence requires that compliance with these provisions leaves an 
NCB’s ability to perform its functions unimpaired
14.  
(b)  Compliance with the monetary financing prohibition  The provisions on central bank profit distributions must also comply with the monetary 
financing prohibition laid down in Article 101(1) of the Treaty and in Council Regulation 
(EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred to in Articles 104 [now  101] and 104b(1) [now 103(1)] of the Treaty
15. 
Those provisions prohibit central bank (ECB or NCB) credit facilities in favour of Community institutions or bodies or in favour of the Member States or their public sector bodies, as well as direct central bank purchases of  debt instruments from such entities. With 
a view to preserving the integrity of the central  bank’s balance sheet, the monetary financing 
prohibition is of key importance to ensuring the primary monetary policy objective of price stability
16, which must not be impeded. Therefore, the prohibition must be interpreted 
extensively to ensure its strict application17. Even if Article 101(1) refers literally to ‘credit 
facilities’, i.e. with the obligation to repay such credit, this prohibition may also apply a 
fortiori  to other forms of funding, i.e. without the obligation to repay, since Article 101 of 
the Treaty has the overall aim of public fina nce discipline and of prohibiting NCBs from 
financing the public sector. This implies that both the ultimate objective and the spirit of these provisions must be taken into account in their interpretation
18. In this respect, to ensure 
that the distribution of central bank profits to  the State fully complies with the monetary 
financing prohibition, it is of crucial importa nce that the schedule for central bank profit 
                                                 
12  See, e.g. in particular paragraph 6 of Opinion CON/2003/ 22, paragraph 2.3 of Opinion CON/2009/26, paragraph 2.2 of 
Opinion CON/2009/53 and the ECB Convergence Report May 2008, p. 20. 
13  See, e.g. paragraph 3.3 of Opinion CON/2009/26, paragr aph 3.2 of Opinion CON/2009/53 and the ECB’s Convergence 
Report May 2008, p. 21. 
14  See ECB’s Convergence Report May 2008, p. 20. Moreover, Artic le 33.2 of the Statute of the ESCB provides that in the 
event of a loss incurred by the ECB which cannot be fully o ffset against the general reserve fund, the ECB’s Governing 
Council may decide to offset the remaini ng loss against the monetary income of th e relevant financial year in proportion 
and up to the amounts allocated to the NCBs. 
15  OJ L 332, 31.12.1993, p. 1. 
16 Article 105(1) of the Treaty and Article 2 of the Statute of the ESCB. 
17 See ECB’s Convergence Report May 2008, p. 22. 
18 See paragraph 9 of ECB Opinion CON/2003/27. 
5 distributions, in full or through instalments, do not imply advances on future or provisional 
profits but only result in the central bank distri buting profits that are fully realised, accounted 
for and audited, which in turn requires due cal culation of profits and losses for the relevant 
reporting period19. 
 
3. Taxation of the Banca d’Italia notional gains related to gold reserves 
3.1  Definition of the tax base   
 The draft article provides that the taxation liab ilities it introduces will be calculated as a proportion 
of the ‘capital gains registered in the balan ce sheet generated from the fiscal year-end price 
evaluation of stocks of precious metals’. The ECB notes in this respect that typically capital gain 
taxes are levied on the amounts of realised prof it resulting from the sale of an asset or from the 
dividend payments, i.e. the tax base is the va lue of the profits generated through actual cash 
flows20. The Decree-Law instead provides for a taxation liability to be calculated by reference to 
the amount of the notional gain resulting from the ch ange in the valuation of the assets (precious 
metals holdings), as registered in the asset holde r’s balance sheet. From the perspective of the 
Banca d’Italia’s potential taxation liability in respec t of its gold reserves, such a definition of the 
tax base raises the following concerns.  
3.2 First, under the Decree-Law, the Banca d’Italia would make financial distributions to the State 
budget of the amounts calculated as a proportion of  notional gains achieved with respect to the 
Banca d’Italia’s gold reserves. In this regard, the ECB considers that the amount to be transferred 
to the State under the proposed new taxation is still uncertain21. Moreover, the Banca d’Italia may 
potentially never realise such notional gains, wh ich may either be a result of its management 
strategy not to sell any of its gold reserves, or a result of subsequent negative price developments, 
or other limitations22 preventing the Banca d’Italia from achieving a profit from its gold sales that 
would correspond to the notional gains used for the tax base calculation. In view of such factors, 
the tax payments to be made by the Banca d’Italia under the Decree-Law would have no 
relationship with the amount of the Banca d’Italia’s  realised profits, if any, actually earned in the 
respective periods. If these profits were lower than  the preceding tax payments, the Banca d’Italia 
would need to decrease its resources to make the re quired payments, which may eventually weaken 
its financial position. This would also constrai n the Banca d’Italia’s capacity to implement 
appropriate management strategies in relation to its  gold reserves since, instead of targeting optimal 
                                                 
19  See e.g. paragraph 3.3 of Opinion CON/2008/82, paragraph 2.4 of Opinion CON/2009/26, and paragraph 2.4 of Opinion 
CON/2009/53. 
20  See e.g. judgment of the Court of Justice of 9 December 2004 in Case C-219/03 Commission v Spain  (OJ C 31, 5.2.2005, 
p. 3) and judgment of the Court of Justice of 14 November 2006 in Case C-513/04 Bernadette Morres v Belgische Staat  
(OJ C 326, 30.12.2006, p. 6). 
21  For instance, the wording of the draft article does not allow the total amount for 2009/2010 to be ascertained. 
22  See in particular the ‘Joint Statement on Gold’ of 8 March 2004, available on the ECB’s website at www.ecb.europa.eu . 
Although the amounts that may be payable by the Banca d’Italia are difficult to ascertain, th ey could be substantial and 
would have an impact on the Ban ca d’Italia’s gold reserves.  
6 realisation of its central bank tasks, it would need to mitigate the financial risks of the arising tax 
liabilities. Furthermore, since holding and managing the foreign reserves of the Member States is a Eurosystem task in accordance with the third inde nt of Article 105(2) of the Treaty, pressure may 
not be exerted on an NCB to pursue investment stra tegies aimed at mitigating the financial risks of 
arising tax liabilities. The draft article would thus impair the institutional and financial 
independence of the Banca d’Italia estab lished under Article 108 of the Treaty.  
3.3  Moreover, since the new tax is levied on theoreti cal profits arising out of changes in the accounting 
valuation of the NCB’s gold reserves, the resulti ng tax payments by the NCB which would not be 
covered by its realised profits would amount to  an increase of the monetary volume through 
provision of central bank money to the public sector. Th is, in parallel to concerns related to central 
bank independence, raises questions regarding compliance of the draft article with the objective of 
maintaining public finance discipline, which unde rlies the monetary financing prohibition in 
Article 101(1) of the Treaty. Furthermore , even if the Banca d’Italia is able to fully cover its 
payments to the State budget with realised profits , such profits would only be available to the 
Banca d’Italia at a later stage, when the actual ca sh flows related to any possible future central bank 
gold sales are realised. This implies that the Banca d’Italia would incur a tax liability in expectation 
of an uncertain income that may or not be realised in the future. Such a situ ation is in itself a form 
of credit to the public sector incompatible with the prohibition on monetary  financing under Article 
101(1) of the Treaty.  
3.4 Finally, the draft article also appears not to be  in line with basic accounting assumptions laid down 
in Guideline ECB/2006/16 of 10 November 2006 on the legal framework for accounting and 
financial reporting in the European System of Central Banks
23. In particular, under the basic 
accounting assumption of prudence, which allows  the achievement and maintenance of the 
financial independence of Eurosyst em central banks, unrealised capital gains are not recognised as 
income in the profit and loss account, but are reco rded directly in a revaluation account and are 
thus excluded from the regular profit distributio n scheme. Any capital losses are deducted from the 
dedicated account. These principles, laid down by the ECB’s Governing Council pursuant to 
Article 26.4 of the Statute of the ESCB, are currently  relevant also for the Banca d’Italia’s taxation, 
according to Article 8(1) of Legisl ative Decree No 43 of 10 March 199824 and Article 114 of the 
Consolidated Law on taxation (Decree of the President of the Republic No 917/1986, as amended). In this regard, paragraph 3 of the draft article, which provides for derogation from all other legal 
provisions, weakens the prudence principle and appe ars to be incompatible with the primacy of 
Community law. 
3.5  The starting date for the taxation obligations and the timing of the taxation payments  
 The draft article does not appear to clearly exclud e a retroactive application of the new tax, since it 
does not clarify whether this tax would apply in the beginning only to the unrealised capital gains 
                                                 
23  OJ L 348, 11.12.2006, p. 1.  
24  Gazzetta Ufficiale della  Repubblica Italiana  No 61, 14.3.1998. 
7 accrued in the first fiscal year from its entry into force, or to the entire amount of unrealised capital 
gains currently registered in the abovementi oned dedicated account. For the ECB, without 
prejudice to the above observations, there should be  no retroactive application of new taxes to 
NCBs, retroactive application be ing understood as application of  the taxation obligations to 
reporting periods earlier than the first full reporting period after entry into force of the draft law. 
Retroactive application of new taxes would impair the NCBs’ ability to efficiently plan the use of 
their financial resources which is essential to ef fectively fulfil their mandate; this would be 
detrimental to the NCBs’ financial independence. 
3.6 The draft article foresees taxation payments in in stalments transferred in the course of the financial 
year on profits whose actual realisation and effective amount are still uncertain. Therefore, 
payments in instalments may result in profit distributions made in anticipation of the central bank income to be realised in the future, which is a prohibited form of central bank financing of the 
public sector under Article 101(1) of the Treaty. In th is context, the ECB considers that any profit 
transfers to be made by the Banca d’Italia should en sure that such transfers are made on the basis of 
actual realised profits stemming from the last reporting period.  
3.7. Set-off right under Law No 289/2002 
 In addition, pursuant to Article 65 of Law No 289 of 27 December 2002
25, as amended, the losses 
stemming from the swap transaction carried out by th e Banca d’Italia with the Italian Treasury in 
2002 may be set off annually against the taxa ble income, up to 50% of its annual amount. The 
proposed new tax rule under examination would pr ovide for a taxation of the unrealised gains 
coming from appreciation of central bank gold reserves, as registered in the Banca d’Italia’s balance sheet and without consid ering the abovementioned right to set off. The ECB assessed the 
mechanism laid down by Law No 289/2002 for compliance with Article 101 of the Treaty
26, and is 
concerned that the draft article now under consid eration will result in a circumvention of this 
mechanism, producing a further in compatibility with the Treaty. 
 4. Conclusions 4.1 The ECB concludes as follows. First, although the pool of addressees of the draft article is defined 
in general terms as holders of precious metals for non-industrial purposes, the Banca d’Italia, due 
to the extent of its gold reserves, is the entity primarily affected. Second, the draft article raises 
concerns with respect to the prohibition on central  bank monetary financing of the public sector to 
the extent that it foresees profit distributions in expectation of uncertain central bank income 
potentially realised in the future, and, in add ition, it excludes set-off rights applicable under earlier 
legislation. Third, the draft article raises concerns  with respect to the Banca d’Italia’s institutional 
and financial independence by allowing for an ar bitrary decrease in the Banca d’Italia’s resources 
                                                 
25  Gazzetta Ufficiale della  Repubblica Italiana , S.O., No 305, 31.12.2002. 
26  See ECB Opinion CON/2002/30. 
8 and by potentially forcing the Ba nca d’Italia to deploy asset management strategies targeting 
financial risks created by the proposed new tax pr ovisions. In particular, the proposed introduction 
of the new tax scheme has not been preceded by  an assessment of the impact on the Banca 
d’Italia’s financial needs. As a result, the Ban ca d’Italia’s financial position would be weakened, 
increasing the risk that it may not have sufficien t resources in the future to carry out its ESCB-
related and other tasks. In addition, the Banca d’ Italia implements a Eurosystem task by holding 
and managing foreign reserves and, to the extent that the proposed new tax provisions would oblige 
the Banca d’Italia to pursue certain asset manage ment strategies, its institutional independence 
would be impaired.  
4.2  In view of the above, the draft article needs to  be reconsidered to address the concerns expressed in 
this opinion, relating in particular to centra l bank independence and the prohibition on monetary 
financing. The ECB expects to be consulted on an y revised draft legislative provisions in this 
matter. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 14 July 2009. 
 
[ signed ] 
 
The President of the ECB 
Jean-Claude TRICHET