EN ECB-PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 12 January  2016  
on a tax for certain financial institutions  
(CON/20 16/1) 
 
Introduction and legal basis  
On 15 December 2015 the European Central Bank (ECB) received a request from the Polish Parliament  
for an opinion on a draft law establishing  a tax on certain financial institutions  (hereinafter the ‘draft law’)1. 
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the sixth  indent of Article  2(1) of Council Decision 98/415/EC2, as 
the draft law relates to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets . In accordance with the first sentence of Art icle 17.5 of the 
Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 
1.  Purpose of the draft law  
1.1 The draft law imposes an obligation on certain financial and insurance institutions to pay a special 
monthly  levy of 0.0366%  on the value of an institution’s assets, subject to certain exemptions, 
thresholds and deductions (hereinafter : the ‘tax’). According to the explanatory memorandum, the 
tax is aimed at creat ing an additional source of funding for  public ex penditure and at increas ing the 
contribution made by  the financial sector for funding public expenditure, in particular social security, 
as set out in the Polish Government’s spending programme.  
1.2 Under the draft law, the tax applies to: (a) domestic banks ; (b) branches of foreign banks ; 
(c) branches of U nion credit institutions ; (d) cooperative savings and loan unions ; (e) domestic 
insurers ; (f) domestic reinsurers ; (g) branches of foreign insurers and reinsurers ; (h) consumer 
credit institutions.   
1.3 Under the draft law, t he tax will not apply to: ( a) state -owned banks ; (b) tax payers  that are subject 
to a supervisory decision ; and (c) tax payers  implementing a restructuring programme. In addition, 
according to the explanatory memorandum, the tax will not apply to: (a ) credit institutions located in 
the Union that carry out banking activities on a cross -border basis under the ‘European single 
                                                 
1  Following amendments, the draft law was adopted by the lower chamber of the Polish Parliament on 
29 December  2015 and sent to the upper chamber. The upper chamber adopted further amendments on 
31 December 2015 . The ECB has a dopted its opinion based on the draft law sent for consultation, also taking into 
account the amendments introduced by the lower and upper chamber s of the Polish Parliament.  
2  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions ( OJ L 189, 3.7.1998, p. 42) . 
ECB -PUBLIC  
2 passport3’; and (b) insurance companies located in the Union carrying out insurance activities other 
than through a branch . 
1.4 Subject to exemptions, the tax base will comprise  the value of the assets at the end of each month 
exceeding a threshold in the amount of : (a) PLN 4 billion for banks and cooperative savings and 
loan unions ; (b) PLN 2 billion for insurers an d reinsurers ; and (c) PLN 200 million for  consumer 
credit institutions . 
1.5 The draft law provides that t he tax bas e will be reduced:  
(a)  for domestic banks  and branches , by the val ue of: (i) own funds referred to in Art icle 126 of 
the Law on Banking4; and (ii) the assets acquired by the taxpayer from Narodowy Bank 
Polski (NBP) and securing refinancing credit provided by the NBP to a credit institution;  
(b)  for cooperative savings and loan unions , by the value of own funds referred to in Art icle 24 of 
the Law on cooperative s avings and loan u nions;  
(c)  for domestic banks , branches  and cooperative savings and loan unions , by the value of: 
(i) the increase in own funds following a supervisor y decision ; and (ii) assets held in the form 
of Treasury bonds;  
(d)  for domestic banks that are affiliating  bank s within the meaning of Article 2(2) of the Law on 
the functioning of cooperative banks, by the value of all funds accumulated on all accounts of 
the affiliated  cooperative banks . 
1.6 The draft law also provi des that if the tax base is denominated in a foreign currency, the conversion 
into PLN will be performed on the basis of an average exchange rate published by the NBP on the last business day prior to the date on which the tax base is determined.   
1.7 The tax will not be a deductible cost. Additionally,  institutions may not use the tax as a basis for 
altering any terms  on which their financial and insurance services  are provided that are included in  
contracts existing prior to the entry into force of the dr aft law.  
 
2. General observations  
2.1 Unlike in most Member States that have introduced a bank levy,  the proposed tax is not linked with 
specific risks stemming from the financial sector , nor does it relate to former public support to the 
financial sect or. Rather,  the proposed tax exclusively aims at increas ing the amount of funds that 
are being contributed by the financial sector  for financing public expenditure. In th is context, t he 
ECB has consistently advised that taxes on financial institutions should be considered in relation to 
the dual objective of: (a) ensuring a more equitable distribution of the costs arising from their 
potential failure between taxpayers and the financial sector; and (b) addressing the risks that they 
                                                 
3  The ‘European single passport’  is a sy stem that allows financial services operators legally established in one 
Member State to establish/provide their services in the other Member States without further authorisation 
requirements . 
4  These own funds are defined under  Article 4(1)(118) of Regul ation (EU) No 575/2013 of the European Parliament 
and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and 
amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).  
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3 pose5. Imposing any ad hoc t axes on banks for general budgetary purposes should be preceded 
by a thorough analysis of potential negative consequences for the banking sector to ensure that 
such taxes do not pose risk s to financial stability and the provision of credit, which could eventually 
adversely affect growth in the real economy.  Such an effect might result in banks offering less 
favourable terms to their customers  when providing loans and other services , and may also induce 
certain banks to cut back on their activities, leading to a reduction in the availability of credit and 
creating uncertainty for these banks6.  
2.2 The i ntroduction of the tax should be carefully considered with regar d to its impact on the 
profitability of affected financial institutions, their capital adequac y and resilience to adverse shocks  
and, more generally , its impact on financial stability , credit growth and the economy generally . In 
this context , the differences in the situation of individual banks need to be taken into account , 
together with the impac t of other regulations being introduced in Poland and the Union. In 
particular, the situation of weaker banks that may record losses as a result of the proposed tax 
should be fully analysed.  
2.3 The proposed tax’s structure may give financial institutions an incentive to change their risk profile  
by restructuring their portfolios in favour of riskier products , by making use of  off-balance sheet 
activities  and/or by transfer ring their assets abroad.  
2.4 In the light of the foregoing,  and in line with its pr evious opinions7, the ECB invites the consulting 
authority to consider whether it would be advisable to undertake a comprehensive impact assessment of the proposed tax . 
 
3. Specific observations  
3.1 Definition of ‘tax base ’ 
The current definition of ‘tax b ase’ in Article 5 of the draft law  is unclear and may therefore create 
an incentive for banks to reduce the size of their balance sheet in order to reduce their tax 
obligation. In the case of an increase in assets resulting from intra -group unsecured fundi ng, the 
corresponding assets should not be taxed twice within the same financial  group , since this could 
have an adverse effect on the intra- group funding needs of credit institutions .  
3.2 Harmonisation of fiscal policies  
The development of a harmonised,  consistent and transparent approach to special taxation of the 
financial sector  is necessary to achieve the overall objective of preserving a  level playing field, 
while limiting distortions to competition, and ensuring that financial stability is equally s afeguarded. 
This is particularly important in the Union,  where the introduction of different bank levy schemes 
                                                 
5  See paragraph 3.1.1 of Opi nion CON/2015/43, paragraph 2.1 of Opinion CON/2013/44, paragraph 2.1 of Opinion 
CON/2011/29 and paragraph 3.2.1 of Opinion CON/2010/62.  All ECB opinions are published on the ECB’s website 
at www.ecb.europa.eu.  
6  See paragraph 3.1.1 of Opinion CON/2015/43, paragraph 2.1 of Opinion CON/2011/29 and paragraph 3.2.2 of 
Opinion CON/2010/62.  
7  See paragraph 2.2 of Opinion CON/2013/44, paragraph 2.2 of Opinion CON/2011/29 and paragraph 3.2.2 of Opinion 
CON/2010/62.  
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4 could potentially undermine the process of financial integration by introducing elements of fiscal, 
regulatory and supervisory fragmentation.  
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main,  12 January 2016.  
 [signed]  
 
The President of the ECB  
Mario DRAGHI