Opinion of the European Central Bank of 24 July 2009 on an amended draft legislative provision on the taxation of the Banca d’Italia’s gold reserves (CON/2009/63)
Date: 2009-07-24
Institutions: European Central Bank
Subjects: Italy, central bank, foreign-exchange reserves, gold, national law, tax

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 24 July 2009 

on an amended draft legislative provision on the taxation of the Banca d’Italia’s gold reserves 

(CON/2009/63) 

Introduction and legal basis 

On  21  July  2009  the  European  Central  Bank  (ECB)  received  a  request  from  the  Italian  Minister  for 

Economic Affairs and Finance for an opinion on a draft amendment to Article 14 of Decree-Law No 78 

of 1 July 2009 containing measures on the crisis and prorogation terms and on the Italian participation in 
international missions1 (hereinafter the ‘Decree-Law’). The Decree-Law is currently being discussed by 

the  Italian  Parliament  for  conversion  into  law  (hereinafter  the  ‘draft  law’)  within  60  days  following 

publication in the Gazzetta Ufficiale della Repubblica Italiana. Article 14 of the Decree-Law provides for 

a  capital  gains  tax  on  non-industrial  gold  of  firms  and  entities  and  relates  to  the  Banca  d’Italia.  The 

subject of this opinion is an amended draft version of Article 14 (hereinafter the ‘amended draft article’), 

in the text attached to the request 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 
provisions2, as the amended draft article relates to the Banca d’Italia. In accordance with the first sentence 

of  Article  17.5  of  the  Rules  of  Procedure  of  the  European  Central  Bank,  the  Governing  Council  has 

adopted this opinion. 

1. 

Purpose of the amended draft article 

The amended draft article is a new version of Article 14 of the Decree-Law, on which the ECB recently 
delivered  Opinion  CON/2009/593.  According  to  the  consultation  letter  from  the  Minister  for  Economic 

Affairs  and  Finance,  in  order  to  address  the  issues  raised  in  Opinion  CON/2009/59,  the  amended  draft 

article  would  replace  the  original  text  of  Article  14.  The  amended  draft  article  is  divided  into  five 

paragraphs. Paragraph 1 provides that for the fiscal year in the course of which the draft law enters into 

force,  a  substitute  tax  of  6 %,  up  to  a maximum  amount  of  EUR  300  million,  will  be  levied  on  capital 

gains  registered  in  the  balance  sheet  generated  from  the  fiscal  year-end  price  evaluation  of  stocks  of 

precious  metals  for  non-industrial  use.  Paragraph  2  provides  for  the  timing  of  the  taxation  payments. 

1  
2  
3  

Gazzetta Ufficiale della Repubblica Italiana No 150, 1.7.2009, p. 1. 
OJ L 189, 3.7.1998, p. 42.  
All ECB opinions are available on the ECB’s website at www.ecb.europa.eu.  

 
 
 
 
                                                 
Paragraph 3 provides for a special tax regime applicable to realised capital gains generated by a total or 

partial  transfer  of  stocks  of  precious  metals  if  such  a  transfer  takes  place  within  three  fiscal  years 

following the fiscal year in the course of which the draft law enters into force. Paragraph 4 contains other 

provisions  relating  to  the  substitute  tax  on  notional  gains  and  provides  for  special  conditions  for  the 

application of the amended draft article in respect of the Banca d’Italia’s gold stocks. Finally, paragraph 5 

provides  for  financial  measures  to  be  adopted  if,  following  recourse  to  the  procedures  laid  down  in 

paragraph 4 for the taxation of the Banca d’Italia’s gold stocks, the increased budgeted revenue provided 

for by the amended draft article is lower than the estimated amount of EUR 300 million for 2009. 

2. 

General observations  

2.1  As already stated above, the original text of Article 14 of the Decree-Law was the subject of the 

recent  ECB  Opinion  CON/2009/59,  in  which  the  ECB  made  several  comments  on  the  draft 

legislative provision on the taxation of the Banca d’Italia’s gold reserves, with particular reference 
to its compliance with Article 108 and Article 101(1) of the Treaty4, as well as Article 26.4 of the 

Statute  of  the  ESCB.  The  comments  specifically  addressed  the  following  issues:  (i)  central  bank 

financial  independence;  (ii)  central  bank  institutional  independence;  (iii)  the  prohibition  on 

monetary  financing;  (iv)  compliance  with  the  Eurosystem  accounting  principles;  (v)  retroactive 

application of the new tax; (vi) the timing of the taxation payments; and (vii) the set-off right under 
Article 65 of Law No 289 of 27 December 2002, as amended5. 

2.2  The observations made in Opinion CON/2009/59 also apply to the amended draft article. 

3. 

Specific comments 

3.1   Central bank financial independence  

In  Opinion  CON/2009/59,  the  ECB  expressed  its  concern  that  the  new  tax  on  unrealised  capital 

gains, generated from the price evaluation of gold stocks on the assets side of the Banca d’Italia’s 
balance sheet6 would weaken the Banca d’Italia’s financial independence7, since the Banca d’Italia 

may potentially: (i) never realise such notional gains, as a result either of its management strategy 

not to sell any of its gold reserves, of subsequent negative price developments, or other limitations 
by which it is bound8 ; or (ii) realise profits that are lower than the notional gains constituting the 

tax  base.  Thus,  the  Banca  d’Italia  may  need  to  decrease  its  resources  to  make  the  required  tax 

payments. The ECB notes that an attempt to address the financial independence issue is  made in 

4  

5  
6  

7  
8  

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 ‘Statute of the ESCB’). 
Gazzetta Ufficiale della Repubblica Italiana, S.O., No 305, 31.12.2002. 
The notional gains, pursuant the prudence principle 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  (see  paragraph  3.4 
below),  are  balanced  by  equal  amounts  booked  in  a  dedicated  revaluation  account  on  the  liabilities  side  of  the  Banca 
d’Italia’s balance sheet. This circumstance is not taken into account by the draft article. 
See paragraphs 2.2(a) and 3.2 of Opinion CON/2009/59. 
See  in  particular  the  Central  Bank  Gold  Agreement  referred  to  in  the  ‘Joint  Statement  on  Gold’  of  8  March  2004, 
available on the ECB’s website. 

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the amended draft article under which: (i) the new tax applies only for the fiscal year in the course 

of  which  the  draft  law  enters  into  force,  i.e.  it  is  a  ‘one-off’  tax;  (ii)  a  maximum  amount  of  the 

payable  tax  is  set  at  EUR  300  million;  and  (iii)  the  new  tax  applies  to  the  Banca  d’Italia’s  gold 

stocks  ‘to  the  extent  appropriate  to  guarantee  the  institutional  and  financial  independence  of  the 

central  bank’,  and  this  extent  is  to  be  determined  by  means  of  a  ‘decree  not  having  a  regulatory 

nature’ by the Minister of Economic Affairs and Finance, after having obtained the Banca d’Italia’s 

assent (parere conforme). Although the limitations referred to under (i) to (iii) aim at mitigating the 

negative  impact  of  the  amended  draft  article  on  the  Banca  d’Italia’s  financial  independence, 

paragraphs 1, 2 and 4 of the amended draft article still provide for a tax on unrealised, and  thus 

uncertain capital gains. Therefore, the tax essentially results in a withdrawal of central bank assets. 

In addition, the amended draft article raises concerns as regards the difficulty in making an advance 

estimate of a national central bank’s (NCB) financial needs: in this regard, the ECB stresses that 

future  financial  and  economic  developments,  especially  in  the  current  crisis  context,  cannot  be 

foreseen  with  any  degree  of  certainty.  For  the  above  reasons,  the  ECB  is  of  the  view  that  the 

amended draft article would impair the principle of central bank financial independence. 

3.2   Central bank institutional independence 

3.2.1  In Opinion CON/2009/59 the ECB noted that the previous version of the draft article, by providing 

for the taxation of theoretical and unrealised capital gains, would also constrain the Banca d’Italia’s 

capacity  to  implement  appropriate  management  strategies  in  relation  to  its  gold  reserves,  since, 

instead  of  targeting  optimal  realisation  of  its  central  bank  tasks,  it  would  need  to  mitigate  the 

financial risks of the arising tax liabilities. Since holding and managing the foreign reserves of the 

Member States is a Eurosystem task pursuant to the third indent of Article 105(2) of the Treaty, the 
Banca d’Italia’s institutional independence safeguarded under the Treaty would thus be infringed9. 

The amended draft article, as seen above, still provides for the taxation of merely theoretical and 

unrealised capital gains on gold reserves. Therefore, the ECB has to reassert the incompatibility of 

the amended draft article with the principle of central bank institutional independence pursuant to 

Article 108 of the Treaty. 

3.2.2  In addition, the new paragraph 3 of the amended draft article provides for a special taxation regime 

that would apply to realised capital gains arising from a transfer of precious metals stocks for non-

industrial use, provided that such transfer takes place within three fiscal years following the fiscal 
year  in  the  course  of  which  the  draft  law  enters  into  force10.  The  ECB  notes  that  this  special 

9  

10  

See paragraph 3.2 of Opinion CON/2009/59. It is noted that the amended draft article seems to confuse the concepts of 
financial independence and institutional independence, since it erroneously assumes that institutional independence could 
be  safeguarded  by  means  of  quantitative  thresholds.  About  the  principle  of  financial  independence,  see,  e.g.,  Opinion 
CON/2009/26;  Opinion  CON/2003/22;  ECB’s  Convergence  Report  May  2008,  pp.  20-22.  About  the  principle  of 
institutional  independence,  see,  e.g.,  Opinion  CON/2008/31;  Opinion  CON/2005/54;  ECB’s  Convergence  Report 
May 2008, pp. 18-19. 
It is understood that the effects of the special taxation regime provided for by paragraph 3 of the amended draft article 
would be as follows: (i) in case a total or partial transfer of gold stocks is made within three fiscal years following the 
fiscal year in the course of which the draft law enters into force, the realised capital gain, which is subject to the income 
tax (IRES) and the regional tax on productive activities (IRAP), would be increased by the amount of the capital gains – 

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taxation  regime:  (i)  would  essentially  apply  to  the  Banca  d’Italia,  as  does  the  substitute  tax 

provided  for  in  paragraph  1  of  the  amended  draft  article,  to  which  it  is  linked;  and  (ii)  given  its 

temporary  nature,  would  place  pressure  on  the  Banca  d’Italia  in  terms  of  the  timing  of  possible 

gold  sales,  and  could  thus  interfere  with  its  foreign  reserve  management  decisions.  The  ECB 

therefore  concludes  that  paragraph  3  of  the  amended  draft  article  constitutes  a  more  serious 

impairment of the institutional independence of the Banca d’Italia established under Article 108 of 

the Treaty than the one the ECB already addressed in Opinion CON/2009/59. 

3.3   Prohibition on monetary financing 

In Opinion CON/2009/59 the ECB noted that, since the substitute tax provided for by the previous 

version of the draft article is levied on unrealised capital gains, i.e. theoretical gains arising out of 

changes in the accounting valuation of the NCB’s  gold reserves, the related tax payments by the 

NCB would result: (i) to the extent that they are not to be covered by future realised profits, in an 

increase of the monetary volume through provision of central bank money to the public sector; and 

(ii)  to  the  extent  that  they  are  to  be  covered  by  future  realised  profits,  in  a  form  of  central  bank 
credit to the public sector, through the distribution in advance of future and uncertain profits11. The 

ECB  found  that  in  both  cases  the  previous  version of  the  draft  article  was  incompatible  with  the 

prohibition on monetary financing under Article 101(1) of the Treaty. 

The amended draft article does not address this fundamental issue, since, as already noted, it still 
provides  for  the  taxation  of  unrealised  capital  gains12.  Therefore,  the  ECB  reasserts  that  the 

amended  draft  article  is  incompatible  with  the  prohibition  on  monetary  financing  under 

Article 101(1) of the Treaty. In addition, such incompatibility cannot be remedied by any form of 

agreement between a Member State and an NCB, nor by any form of ‘assent’ issued by the latter, 

as seems to be implied by paragraph 4 of the amended draft article. 

3.4   Eurosystem accounting principles  

In Opinion CON/2009/5913 the ECB stated that the previous version of the draft article was not 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 
Banks14  and,  in  particular,  with  the  basic  accounting  assumption  of  prudence,  which  allows  the 
achievement and maintenance of the financial independence of Eurosystem central banks15.  

corresponding to the transferred stocks – subject to the substitute tax under paragraph 1, and the substitute tax paid with 
reference to the same stocks would be deducted by income taxes; (ii) on the contrary, in the event that such a transfer is 
made  after  the  abovementioned  deadline,  the  realised  capital  gains  subject  to  IRES  and  IRAP  would  no  longer  be 
increased by the said amount, and the substitute tax paid would no longer be deductible. 
See paragraph 3.3 of Opinion CON/2009/59. 
See paragraphs 1, 2 and 4 of the amended draft article. 
See paragraph 3.4 of Opinion CON/2009/59. 
OJ L 348, 11.12.2006, p. 1. 
It is recalled that under the basic assumption of prudence, unrealised capital gains are not recognised as income in the 
profit  and  loss  account,  but  are  recorded  directly  in  a  revaluation  account  and  are  thus  excluded  from  the  profit 

11  
12  
13  
14  
15  

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The  ECB  notes  that  this  issue  is  not  addressed  by  the  amendment  under  consideration. 

Furthermore,  the  amended  draft  article  still  provides  for  a  derogation  from  all  other  legal 

provisions, which, as already stated in Opinion CON/2009/59, weakens the prudence principle and 

appears to be incompatible with the primacy of Community law. 

3.5   Retroactivity of the new tax 

3.5.1  In  Opinion  CON/2009/59,  the  ECB  noted  that  the  previous  version  of  the  draft  article  did  not 

clearly exclude a retroactive application of the new tax, i.e. its application to the entire amount of 

unrealised  capital  gains  currently  registered  in  the  dedicated  revaluation  account,  instead  of  the 

mere  amount of notional gains accrued in the first fiscal year from its entry into force. The ECB 

also  noted  that  any  retroactive  application  of  new  taxes  to  NCBs,  retroactive  application  being 

understood as application of the taxation obligations to reporting periods earlier than the first full 

reporting  period  after  entry  into  force  of  the  tax,  would  be  detrimental  to  central  bank  financial 

independence, since it would impair the NCBs’ ability to efficiently plan the use of their financial 
resources16. 

3.5.2  In  the  light  of  the  amended  draft  article  and  of  the  explanatory  memorandum  to  the  draft  law17, 

which has now become available, the ECB understands that the new tax is indeed retroactive in two 

different ways: (i) it would apply to the current reporting period, which started before its entry into 

force; and (ii) it would apply to the entire amount of unrealised capital gains currently registered in 

the  dedicated  revaluation  account,  without  prejudice  to  the  maximum  tax  amount  set  pursuant  to 
paragraphs 1 and 4 of the amended draft article18. The ECB remarks that such retroactive effects of 

the new tax aggravate its non-compliance with the principle of central bank independence. 

3.6   Timing of the taxation payments 

3.6.1  In Opinion CON/2009/59 the ECB stated that, without prejudice to the preceding observations, the 

taxation  payments  mechanism  provided  for  by  the  previous  version  of  the  draft  article  could 
represent per se a further breach of Article 101(1) of the Treaty19. 

3.6.2  The ECB confirms this statement and furthermore notes that this breach is now aggravated by the 

amended draft article, which deleted the taxpayer’s option, originally provided for by paragraph 2 

of  the  previous  version  of  the  draft  article,  of  paying  50 %  of  the  instalment  on  the  tax  in  two 

instalments of equal amounts within the deadline for annual settlement of income tax. 

distribution scheme. 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 Legislative Decree 
No  43  of  10  March  1998  (Gazzetta  Ufficiale  della  Repubblica  Italiana  No  61,  14.3.1998)  and  Article  114  of  the 
Consolidated  Law  on  taxation  (Decree  of  the  President  of  the  Republic  No  917/1986,  in  Gazzetta  Ufficiale  della 
Repubblica Italiana, S.O., No 302, 31.12.1986, as amended). 
See paragraph 3.5 of Opinion CON/2009/59. 
The explanatory memorandum is now available on the Italian Parliament’s website at www.camera.it. 
It is noted that the maximum tax amount set at EUR 300 million does not exclude the retroactive effects described above. 
See paragraph 3.6 of Opinion CON/2009/59. 

16  
17  
18  
19  

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3.7   Set-off right under Law No 289/2002 

The last statement made in Opinion CON/2009/5920 concerns the exclusion, with reference to the 

new  tax,  of  the  set-off  right  granted  to  the  Banca  d’Italia  by  Article  65  of  Law  No  289  of  27 
December  200221,  as  amended.  Also  this  issue  is  not  addressed  by  the  amended  draft  article; 

therefore the ECB entirely refers to and reasserts its statement, which relates to a further issue of 

non-compliance with Article 101(1) of the Treaty.   

4. 

Conclusions 

In view of the above, the ECB concludes as follows.  

First,  the  amended  draft  article  impairs  the  Banca  d’Italia’s  financial  independence,  by  allowing  for  a 

decrease  in  the  Banca  d’Italia’s  resources  which  has  no  relationship  with  the  amount  of  the  Banca 

d’Italia’s  realised  profits.  Second,  the  amended  draft  article  impairs  the  Banca  d’Italia’s  institutional 

independence,  since  it  potentially  forces  the  Banca  d’Italia,  with  particular  reference  to  its  Eurosystem 

task of holding and managing foreign reserves, to deploy asset management strategies targeting financial 

risks created by the proposed new  tax provisions. Third, the amended draft article is incompatible with 

the prohibition on central bank monetary financing of the public sector, to the extent that it provides for 

profit distributions in the expectation of uncertain central bank income potentially realised in the future 

and, in addition, it excludes set-off rights applicable under earlier legislation. Fourth, the amended draft 

article is not in line with the rules established by the ECB pursuant to Article 26.4 of the Statute of the 

ESCB. 

The ECB trusts that it will be consulted on any future or revised draft legislative provisions in this matter. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 24 July 2009. 

[signed] 

The Vice-President of the ECB 

Lucas D. PAPADEMOS 

20  
21  

See paragraph 3.7 of Opinion CON/2009/59. 
Gazzetta Ufficiale della Repubblica Italiana, S.O., No 305, 31.12.2002. 

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