Opinion of the European Central Bank of 5 August 2025 on a tax on certain financial institutions (CON/2025/20)
Date: 2025-08-05
Institutions: European Central Bank
Subjects: financial stability

ECB-PUBLIC 

EN 

 OPINION OF THE EUROPEAN CENTRAL BANK 

of 5 August 2025  

on a tax on certain financial institutions 

(CON/2025/20) 

Introduction and legal basis 

On 28 May 2025 the European Central Bank (ECB) received a request from the Polish Parliament for an 

opinion on a draft law amending the Law on tax on certain financial institutions (hereinafter the ‘draft law’). 

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 Article 2(1), sixth indent, of Council Decision 98/415/EC1, as the 

draft law relates to rules applicable to financial institutions insofar as they materially influence the stability 

of financial institutions and markets, and the ECB’s tasks concerning the prudential supervision of credit 

institutions pursuant to Article 127(6) of the Treaty. In accordance with Article 17.5, first sentence, 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  introduces  a  tax  incentive  aimed  at  lowering  interest  rate  margins  applicable  to 

mortgage loans in Poland. According to the explanatory memorandum accompanying the draft law, 

such margins are high. Relying on ECB data, the explanatory memorandum states that in February 

2025 the mortgage margin in Poland was 3,54 %, making it the highest among all Union Member 

States. According to the explanatory memorandum, the collection of high margins makes it difficult, 

sometimes even impossible, for Polish families to meet their basic housing needs.  

1.2  To that end, the draft law proposes to amend the Law on tax on certain financial institutions. The 

Law imposes an obligation on certain financial and insurance institutions, including credit institutions, 

to pay a special monthly tax (hereinafter the ‘proposed tax’) amounting to 0,0366 % of the tax base, 

which  is  composed  of  an  institution’s  assets,  subject  to  certain  exemptions,  thresholds  and 

deductions. According to the draft law, for the part of the tax base that is composed of assets in the 

form of mortgage loans, the proposed tax is to be calculated as 0,055 % of the tax base per month 

multiplied  by  the  weighted  average  interest  margin  of  mortgage  loans  granted  by  the  taxpayer 

expressed in percentage points less 1. The draft law further specifies that if the mortgage interest 

margin  is  1  percentage  point  or  less  such  assets  are  exempt  from  the  proposed  tax.  Margin  is 

calculated  as  the  effective  annual  interest  rate  reduced  by  the  three-month  Warsaw  Interbank 

Offered Rate (3M WIBOR). In the case of mortgage loans with a periodically fixed interest rate, the 

1  

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, ELI: http://data.europa.eu/eli/dec/1998/415/oj).  

 
 
 
 
 
 
margin for the entire period is to be determined on the basis of its amount on the day starting the 

period. 

1.3  According to the explanatory memorandum accompanying the draft law, the amendments proposed 

by the draft law should translate into a reduction in the margin above 3M WIBOR to 1 %, as values 

above  this  level  would  be  taxed  at  a  marginal  rate  of  85 %  (66 %  in  the  form  of  a  tax  on  certain 

financial institutions and 19 % in the form of corporate income tax), thus nullifying the economic sense 

of the application of higher margins by banks.  

1.4  The explanatory memorandum accompanying the draft law also states that the costs of tax reduction 
for some assets should be offset by the increased taxes that will be imposed on other assets.  

1.5  The proposed tax is to apply to (1) domestic banks; (2) Polish branches of banks incorporated outside 

of the Union; (3) Polish branches of Union credit institutions; and (4) credit unions.  

1.6  The proposed date of entry into force of the draft law is 1 January 2026.  

2. 

General observations 

2.1  The ECB notes that Poland is a Member State with a derogation from participation in the third stage 

of economic and monetary union, and that the central banks of Member States with a derogation 

retain their powers in the field of monetary policy according to national law 2. Against this backdrop, 

the ECB refrains from commenting on the monetary policy implications of the draft law.  

2.2  As previously noted by the ECB 3, Article 119(1) of the Treaty provides that Member States’ economic 

policies must be conducted in accordance with the principle of an open market economy with free 

competition. The ECB is as a rule not in favour of the regulation of interest rates charged by credit 

institutions, as further set out in paragraph 3, and more generally because such regulation would, 

under normal circumstances, diverge from basic economic and market principles.  

2.3  With respect to the ECB data quoted in the explanatory memorandum accompanying the draft law, 

the ECB notes that in its recent Financial Stability Report Narodowy Bank Polski (NBP) specifically 

analysed the level of credit margins on housing loans in Poland versus the Union4. NBP concluded 

that credit margins in Poland are currently below the long-term national average. In addition, whilst 

they  remain  higher  than  the  average  in  other  Union  Member  States,  this  is  partly  due  to  factors 

specific to the Polish banking sector, namely the tax on bank assets and the cost of early prepayment 

risk. In Poland, the expected cost of early prepayment is included in the credit margin at the time the 

loan is granted and applies to all borrowers, not only those who prepay their loans. Taking all of this 

into account, in NBP’s view, the margins do not differ significantly from the Union average, although 

they are indeed higher. 

2.4  Given the statement in the explanatory memorandum accompanying the draft law that the costs of 

tax reduction for some assets should be offset by the increased taxes that will be imposed on other 

2  
3  
4  

See Article 43.2 of the Statute of the European System of Central Banks and of the European Central Bank. 
See paragraph 3.1.4 of Opinion CON/2016/54. All ECB opinions are published on EUR-Lex. 
See Narodowy Bank Polski, Financial Stability Report, June 2025, Box 2.2, pp. 49-52, available on NBP’s website at 
www.nbp.pl. 

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assets, the ECB understands that the draft law is intended to apply not only to future mortgage loans, 

but also to outstanding mortgage loans (see also paragraph 4.5 below). 

2.5  Finally, the ECB recalls that it was previously consulted by the Polish Parliament and adopted an 

opinion on the Law on tax on certain financial institutions5.  

3. 

Financial stability and prudential supervisory considerations  

3.1  The ECB acknowledges that taxes of similar type to the proposed tax are sometimes justified given 

the  social  costs  of  high  interest  rates  on  households.  High  borrowing  costs  can  impose  strain  on 

households,  limiting  their  access  to  housing  and  other  essential  services.  By  incentivising  lower 

interest rates margins, such taxes are intended to facilitate access to housing and support broader 

economic  activity.  Nonetheless,  the  ECB  underlines  the  importance  of  balancing  these  social 

objectives against the potential adverse effects on the banking sector and on financial stability. A 

stable  financial  system  is  a  prerequisite  for  sustainable  economic  growth  and  effective  monetary 

policy. 

3.2 

In  particular,  the  proposed  tax  may  affect  the  profitability  of  banks  and,  over  time,  their  solvency 

position. A reduction in profitability undermines banks’ ability to build additional capital buffers and 

adequately provision for impairments, especially during periods of economic uncertainty. Over time, 

this  erosion  may  weaken  the  sector’s  solvency,  reduce  its  ability  to  extend  credit,  and  hinder  its 

capacity to weather economic shocks 6. Moreover, the proposed tax could increase the market cost 

of debt and the cost of capital for banks by imposing an additional financial burden on them. Such a 

development could ripple through the financial system, potentially leading to tighter credit conditions 

for  businesses  and  households,  reduced  access  to  funding,  and  potentially  adverse  effects  on 

broader economic growth.  

3.3  While the proposed tax aims to reduce borrowing costs for households, its actual impact is uncertain 

and  could  vary  significantly.  On  the  one  hand,  the  proposed  tax  could  curtail  lending  to  some 

categories of borrowers or increase interest rate margins. For instance, if banks perceive that the 

risks and costs associated with lending—such as operational expenses and potential credit losses—

are  not  adequately  compensated,  they  may  reduce  their  willingness  to  provide  mortgage  loans 

altogether. Alternatively, banks might raise interest rate margins beyond pre-tax levels to ensure the 

after-tax margin covers their costs. Banks may also select the least risky borrowers, excluding riskier 

households from the mortgage market. These unintended consequences could lead to the proposed 

tax  having  the  opposite  effect  to  its  intended  goal  and  restricting  access  to  credit  for  many 

households.  On  the  other  hand,  if  the  proposed  tax  succeeds  in  lowering  lending  spreads  and 

borrowing costs,  it could incentivise borrowing by riskier households,  potentially  weakening credit 

standards and exposing banks to greater credit risks. This, in turn, could heighten financial stability 

concerns,  particularly  during  economic  downturns.  These  contrasting  outcomes  highlight  the 

complexity  and  unpredictability  of  the  proposed  tax’s  effects.  They  underscore  the  need  for  a 

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6  

See Opinion CON/2016/1. 
The ECB has previously opined on draft legislation introducing taxes applicable to credit institutions in several Member 
States.  See,  for  example,  Opinions  CON/2016/1,  CON/2019/18,  CON/2019/40,  CON/2019/44,  CON/2020/28, 
CON/2022/36, CON/2023/9, CON/2023/26, CON/2023/35, CON/2023/45 and CON/2024/35. 

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comprehensive  impact  assessment  and  ongoing  monitoring  to  ensure  the  measure  balances  its 

social objectives with the stability of the financial system, as mentioned below. 

3.4  At the same time, the limit on the profitability of a core business activity of the banking system, such 

as mortgage lending, might induce distortions in the banking sector depending on credit institutions’ 

business models and their involvement in mortgage lending versus other activities. These distortions 

could lead banks to engage in risk-taking behaviour in other business segments, adversely impacting 

the efficient allocation of credit in the economy and financial stability.  

3.5  While providing a direct incentive mechanism to lower lending spreads, the Polish legislator is invited 

to consider alternative policies. For example, more targeted mechanisms are available to support 

housing  for  low-income  households.  For  instance,  governments  could  adopt  fiscal  policies  that 

specifically  target  vulnerable  groups,  such  as  providing  interest  rate  subsidies  or  direct  financial 

assistance to lower-income families. These measures would avoid distortions in the banking sector 

while achieving the desired social outcomes more effectively. If well-targeted, these policies should 

not  lead  to  an  increase  in  residential  property  prices  or  exacerbate  the  unaffordability  of  homes. 

Additionally,  favouring  competition  in  the  banking  sector  should  also  lead  to  lower  spreads,  thus 

reducing borrowing costs for households and businesses and making credit more accessible. Hence, 

policies that promote a competitive banking environment (e.g. reducing barriers to entry, promoting 

financial  innovation,  and  enhancing  transparency  on  pricing)  may  achieve  similar  objectives  as 

taxation without the potential for distortion that taxation measures entail. 

3.6  The  ECB  has  consistently  advised  that  the  introduction  of  special  taxes  on  banks  or  financial 

institutions should be preceded by a comprehensive impact assessment 7. The implementation of the 

draft law could entail financial costs for the Polish banking sector. The explanatory memorandum 

accompanying  the  draft  law  does  not  contain  an  impact  assessment  regarding  the  profitability, 
capitalisation and future lending capacity of the banking sector. This is crucial to mitigate unintended 

consequences and to ensure that the proposed tax achieves its intended objectives without harming 

the broader economy. At a minimum, the ECB recommends careful monitoring and assessment of 

the  effects  of  such  taxes  on  lending  growth,  state  revenues,  credit  risk  profiles,  and  the  overall 

banking  sector.  This  monitoring  should  be  ongoing,  allowing  for  timely  adjustments  if  negative 

outcomes begin to materialise.    

4. 

Specific observations 

4.1  The  draft  law  refers  to  the  weighted  average  interest  margin  of  mortgage  loans  granted  by  the 

taxpayer in the calculation of the proposed tax. The Polish legislator is invited to consider whether 

reference should be made to the weighted average interest margin of mortgage loans granted by the 

taxpayer during a specified reference period 8.  

4.2  The draft law appears to apply to mortgage loans denominated in any currency, including Polish zloty 

(PLN). The Polish legislator is invited to consider whether the margin should be calculated under the 

7  

8  

See, for example, paragraph 3.2.2 of Opinion CON/2010/62, paragraph 3.3 of Opinion CON/2011/31, paragraph 2.2 
of Opinion CON/2013/44, paragraph 2 of Opinion CON/2016/1 and paragraph 2.1 of Opinion CON/2019/18. 
See letter of Marcin Mikołajczyk, Deputy Chairperson, Polish Financial Supervision Authority, to Hołownia Szymon, 
Marshall of the Sejm, p. 2 (30 May, 2025), available on Sejm’s website at www.sejm.gov.pl. 

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draft law as the effective annual interest rate reduced by 3M WIBOR in the case of mortgage loans 

not denominated in PLN9. 

4.3  The ECB understands that the 3M WIBOR or six-month WIBOR is usually used as a benchmark for 

floating-rate PLN-denominated loans in the Polish market. In the case of periodically fixed rate loans, 

where  instalments  do  not  change  during  the  agreed  period  (usually  of  five  years),  the  ECB 

understands that the interest rate is set on the basis of the benchmark reflecting the average level of 

interest rates expected by the market during that period, i.e. five-year interest rate swaps 10. Against 

this backdrop, the Polish legislator is invited to consider whether it is appropriate that margin should 

be calculated under the draft law as the effective annual interest rate reduced by 3M WIBOR for all 

mortgage loans denominated in PLN. 

4.4  Although  the  main  purpose  of  the  draft  law  is  to  reduce  margins  on  mortgage  loans  for  housing 

purposes, the draft law does not specify that only such mortgage loans (and not mortgage loans for 

commercial purposes) fall within its scope. The Polish legislator is invited to consider this point.  

4.5  Finally,  the  draft  law  should  explicitly  specify  whether  it  applies  to  loans  which  are  currently 

outstanding, or whether it only applies to future loans. Applying the proposed tax to existing loans 

could create significant challenges, as banks cannot adjust margins on loans that have already been 

issued.  Such  an  approach  could  further  strain  banks’  financial  positions  and  create  legal 

uncertainties, undermining the predictability of the regulatory framework. 

This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 5 August 2025. 

[signed] 

The President of the ECB 

Christine LAGARDE 

9  

10  

See letter of Marcin Mikołajczyk, Deputy Chairperson, Polish Financial Supervision Authority, to Hołownia Szymon, 
Marshall of the Sejm, p. 2 (30 May, 2025), available on Sejm’s website at www.sejm.gov.pl. 
See  Narodowy  Bank  Polski,  Financial  Stability  Report,  June  2025,  Box  2.2,  p.  49,  available  on  NBP’s  website  at 
www.nbp.pl. 

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