sprak: en

title: Opinion of the European Central Bank of 30 March 2026 on an increase in a tax imposed on credit institutions (CON/2026/11)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 30 March 2026 on an increase in a tax imposed on credit institutions

text: Introduction and legal basis

text: On 10 March 2026 the European Central Bank (ECB) received a request from the Belgian Deputy Prime Minister and Minister for Finance and Pensions, in charge of the National Lottery and the Federal Cultural Institutions, for an opinion on a draft program law (hereinafter the ‘draft law’) amending, inter alia, the Belgian Code of miscellaneous duties and taxes as regards the tax imposed on credit institutions (hereinafter the ‘bank tax’). 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

text: Council Decision 98/415/EC

text: , as the draft law relates to (1) rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets, and (2) the ECB’s tasks concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. In accordance with

text: Article 17.5

text: , first sentence, of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 By way of background, the ECB understands that the bank tax applies to all credit institutions incorporated in Belgium and branches located in Belgium of credit institutions incorporated outside Belgium. The applicable rates are currently as follows: (1) 0,15205 % on the first EUR 50 billion of the tax base amount and (2) 0,20204 % on the portion of the tax base amount exceeding EUR 50 billion. The tax base is the average amount of the relevant credit institution or branch’s debts to customers during the year preceding the tax period. For this purpose, ‘customers’ mean any persons other than credit institutions, central banks and assimilated institutions, postal cheque offices and national and international official banking-type institutions, and debts owed to customers include debts resulting from the institution’s standard banking activity, excluding debts represented by a security . The ECB understands that the bank tax is a non-deductible expense for corporate income

text: 1 Code of miscellaneous duties and taxes (Code des droits et taxes divers/Wetboek diverse rechten en taksen), previously Code of taxes assimilated to stamp (Code des taxes assimilées au timbre, Moniteur belge, 6 mars 1927/ Wetboek der met het zegel gelijkgestelde taksen, Belgisch Staatsblad, 6 maart 1927).

text: Council Decision 98/415/EC of 29 June 1998

text: 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).

text: Article 201

text: /11 of the Code of miscellaneous duties and taxes, which also provides that the average amount of debts owed to customers is to be understood to mean the arithmetic mean of the amounts which, in accordance with the rules of the Banque Nationale de Belgique/Nationale Bank van België in the context of territorial reporting, must be entered at the end of each month of the year in question in line 229 of table 00.20 ‘Debts owed to customers’ (column 05, Total amount) of Schedule A. tax purposes. It is prohibited for credit institutions (and their branches) to pass on the cost of the bank tax to their customers, and there is a fine for breaches of this prohibition . 1.2 The draft law proposes to increase the two abovementioned bank tax rates to bring them to, respectively, (1) 0,19286 % on the first EUR 50 billion of the tax base amount and (2) 0,25626 % on the portion of the tax base amount exceeding EUR 50 billion . According to the Minister for Finance, this increase aims to sustain the efforts being made to reduce the Belgian public finance deficit. 1.3 The draft law also proposes to deduct certain debts to the European Investment Bank (EIB) and to central counterparties (CCPs) from the tax base . According to the explanatory memorandum accompanying the draft law, the rationale for the deduction of debts to the EIB is to encourage Belgian banks to have recourse to the EIB for the financing of loans to small and medium-sized enterprises, thereby sustaining the economy; and the rationale for the deduction of debts to CCPs is to allow Belgian credit institutions and their branches to continue deducting such debts from the tax base, notwithstanding the fact that some CCPs are no longer authorised as credit institutions. 1.4 The draft law provides that both amendments will be effective as from the tax year 2027 .

text: 2. General observations

text: 2.1 The ECB adopted an opinion on 19 December 2025 on the most recent increases to the bank tax 8, 9 introduced by the Law of 18 December 2025 including miscellaneous provisions . 2.2 The ECB understands that the tax base for the bank tax is largely composed of credit institutions’ customer deposits and excludes inter-bank deposits.

text: 3. Monetary policy context

text: 3.1 From a monetary policy perspective, credit institutions play a special role in ensuring the smooth transmission of monetary policy measures to the wider economy. The envisaged increase in tax pressure on Belgian credit institutions on the basis of deposits made by their customers (other than credit institutions) would affect those credit institutions differently depending on their business models, and also increase their overall tax burden, creating potential distortions and increased heterogeneity in the transmission of monetary policy in Belgium and throughout the euro area. While Belgian credit institutions remain well capitalised and still make sound profits, the adverse impacts of trade tensions, geopolitical instability and increased commodity prices on the economy imply increased uncertainty for credit institutions’ lending behaviour and profitability. In this respect, the draft law might entail pro-cyclical effects in credit institution lending dynamics. The increased taxation on the basis of their customer deposit base would incentivise credit institutions to reduce the

text: Article 201

text: /19 of the Code of miscellaneous duties and taxes.

text: 5 Article 8 of the draft law.

text: 6 Article 7 of the draft law.

text: 7 Article 9 of the draft law.

text: 8 Loi du 18 décembre 2025 portant des dispositions diverses, Moniteur belge, 30 décembre 2025/Wet van 18 december 2025 houdende diverse bepalingen, Belgisch Staatsblad, 30 december 2025.

text: 9 Opinion

text: . All ECB opinions are published on EUR-Lex. remuneration and attractiveness of deposits for households and firms, at their expense, and turn to other funding sources . 3.2 The costs from increased taxes could also lead credit institutions to tighten the conditions under which they finance the economy, either indirectly through the potential adverse effects on their capital positions resulting from dampened profitability, or directly as they would still pass on part of those costs to borrowers. Indeed, the imposition of a specific fine for breaches of the existing prohibition under

text: Article 201

text: /19 of the Code of miscellaneous duties and taxes on credit institutions (and their branches) passing on the cost of the bank tax to their customers cannot change the basic fact that the financial conditions under which credit institutions operate determine the conditions under which they finance the economy. The ability of individual credit institutions to maintain adequate capital positions, to continue to prudently build provisions for potentially increased future credit impairments, and to set conditions on deposits, lending and other banking services vis-à-vis their customers in adequation with the ECB’s monetary policy, needs to be preserved. Curtailing this ability would undermine the smooth bank-based transmission of monetary policy measures to the wider economy, coming at the expense of the provision of credit to the Belgian economy and adversely affecting real economic growth .

text: 4. Financial stability context

text: 4.1 The ECB has previously opined on draft legislation introducing taxes applicable to credit institutions in several Member States . It has, in this respect, underscored that, in general, imposing taxes on the banking sector could make it more difficult for credit institutions to build up additional capital buffers, as their retained earnings will be reduced, making them less resilient to economic shocks. As a result, such taxes could have negative economic effects by limiting credit institutions’ ability to provide credit. It is essential that credit institutions have a sound capital base for them to fulfil their role as credit intermediaries within the economy. Higher costs and reduced credit supply, or higher costs of other banking services, can adversely affect real economic growth . 4.2 As noted in paragraph 1.2, the increase in bank tax rates is intended to support efforts to reduce the Belgian public finance deficit. The ECB has previously recommended that a clear separation should be maintained between the taxation of the banking sector and general government budgetary resources, to avoid their use for general fiscal consolidation purposes . Furthermore, frequent amendments to the tax rate heighten uncertainty over the profitability outlook of the Belgian banking

text: 10 See paragraph 3.1 of Opinion

text: 11 See paragraph 3.2.2 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 3.1 of Opinion

text: , paragraph 3.1 of Opinion

text: , paragraph 3.4 of Opinion

text: , paragraphs 3.4 and 4.1 of Opinion

text: and paragraph 3.2 of Opinion

text: 12 See Opinions

text: and

text: 13 See paragraph 3.2.2 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 3.1 of Opinion

text: , paragraph 3.1 of Opinion

text: , paragraph 4.1 of Opinion

text: , paragraph 4.1 of Opinion

text: , paragraph 4.1 of Opinion

text: and paragraph 4.1 of Opinion

text: 14 See paragraph 3.2.1 of Opinion

text: , paragraph 3.1 of Opinion

text: , paragraph 3.4 of Opinion

text: , paragraph 4.2 of Opinion

text: and paragraph 4.2 of Opinion

text: . sector, raising the cost for credit institutions of issuing new equity capital and attracting wholesale funding . 4.3 While the Belgian banking sector remains profitable and well capitalised, the costs from increased taxes could adversely affect credit institutions’ capital positions by dampening their profitability. Furthermore, as the bank tax is calculated on certain parts of the balance sheet and not on net profits, it also applies to credit institutions that are recording net losses, further damaging their resilience . In that regard, the bank tax may put additional pressure on credit institutions’ capacity to maintain a solid capital position or to rebuild buffers in an environment in which profits are lower and (credit) losses occur. In particular, given the current geopolitical environment and the heightened level of uncertainty, these factors should be duly considered in order to ensure that credit institutions remain well positioned to absorb potential future losses . 4.4 In addition, the imposition of a levy on customer deposits, which constitute a stable source of funding for credit institutions, may incentivise them to switch to less stable funding sources, such as shortterm wholesale funding. Relying on less stable funding sources may increase the likelihood that disruptions to a credit institution’s regular sources of funding will erode its liquidity position. Moreover, relying on more expensive wholesale funding sources may further negatively affect a credit institution’s profitability. 4.5 Furthermore, the bank tax may lead to fragmentation in the European financial system because of the heterogeneous nature of such taxes as between the banking sectors in different countries. The risk of double taxation for credit institutions in other jurisdictions where a special bank tax is also levied may be a further source of such fragmentation . 4.6 In the light of the above, the ECB recommends that, in order to assess whether its application poses risks to financial stability, and in particular whether it has the potential to impair the banking sector’s resilience and cause market distortion, the draft law should be accompanied by a thorough analysis of potential negative consequences for the banking sector . This analysis should set out in detail the specific impact of the bank tax on credit institutions’ longer-term profitability and capital base, access to funding and the provision of new lending and competition conditions in the market, and its potential impact on liquidity.

text: 5. Considerations relating to the prudential supervision of credit institutions

text: 5.1 The observations concerning the prudential supervision of credit institutions set out in Opinion

text: acquire further weight in view of the proposed increase of the bank tax. This is

text: 15 See paragraph 4.2 of Opinion

text: 16 See paragraph 3.3 of Opinion

text: , paragraph 4.2 of Opinion

text: and paragraph 4.2 of Opinion

text: 17 See paragraph 3.2 of Opinion

text: , paragraph 4.3 of Opinion

text: , paragraph 4.2 of Opinion

text: and paragraph 4.2 of Opinion

text: 18 See paragraph 4.3 of Opinion

text: , paragraph 4.4 of Opinion

text: and paragraph 4.3 of Opinion

text: 19 See paragraph 3.4 of Opinion

text: , paragraph 3.7 of Opinion

text: , paragraph 4.6 of Opinion

text: , paragraph 4.5 of Opinion

text: , paragraph 4.6 of Opinion

text: and paragraph 4.4 of Opinion

text: 20 See paragraph 5 of Opinion

text: . particularly the case given the current period of heightened geopolitical instability, which has direct impacts on the local economy, particularly via energy costs. 5.2 The bank tax is narrowly focused on deposits of customers other than credit institutions. This disadvantages credit institutions that provide critical financial services to the public against other credit institutions that, for example, predominantly carry on trading activities without a large deposit base. It also ignores credit institutions’ profitability or, more importantly, their lack of profitability. Consequently, the bank tax is a drag on credit institutions’ profitability, viability and sustainability, and exacerbates the difficulties experienced by credit institutions that are already loss-making or barely profitable . 5.3 While the Belgian banking system is currently well capitalised, lower or no net profits result in lower or no potential to retain earnings, which are important to sustain capital positions. The overall impact on credit institutions’ capital positions will depend on how they respond to the additional tax burden. Credit institutions may choose to offset the bank tax by reducing planned capital distributions, thereby maintaining their capital positions, or they may proceed with their original distribution plans, which, as a result of the impact of the bank tax, would erode their capital positions. This in turn would reduce credit institutions’ ability to provide loans and also reduce their capacity to absorb the potential downside risks of an economic downturn . This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 30 March 2026. [signed] The President of the ECB Christine LAGARDE


text: Latvijas Bankas likums. Latvijas Vēstnesis, 193, 06.10.2021. 2

text: 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). 3 See Article 15(8) of the Law on Latvijas Banka. 4 See Opinion

text: . All ECB opinions are published on EUR-Lex. 5 See Section 3.2.2 of the Guide to consultation of the European Central Bank by national authorities regarding draft legislative provisions (April 2025), available on the ECB’s website at www.ecb.europa.eu.

text: See paragraph 1.1 of Opinion

text: . 7 See Article 11 of the Law on Latvijas Banka. 8 See paragraph 2.1 of Opinion

publisher: Europeiska centralbanken

title: Opinion of the European Central Bank of 31 March 2026 on the composition of the Council of Latvijas Banka (CON/2026/12)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 31 March 2026 on the composition of the Council of Latvijas Banka (

text: ) Introduction and legal basis

type: rubrik

text: On 11 March 2026, the European Central Bank (ECB) received a request from the Budget and Finance (Taxation) Committee of the Latvian Parliament for an opinion on a draft amendment (hereinafter the ‘draft amendment’) to the draft law amending the Law on Latvijas Banka (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), third indent, of

text: Council Decision 98/415/EC

text: , as the draft amendment relates to Latvijas Banka. In accordance with

text: Article 17.5

text: , first sentence, of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

type: stycke

text: 1. Purpose of the draft amendment

text: 1.1 The draft amendment proposes to reduce the number of members of the Council of Latvijas Banka (hereinafter the ‘Council’) from seven to six. 1.2 As noted in the consultation request accompanying the draft amendment, Latvijas Banka is already successfully operating with six Council members. For the purposes of improving efficiency and optimisation of the public sector, the number of Council members of institutions and State-owned enterprises, including Latvijas Banka, should be reviewed and reduced where possible. A Council composed of six members does not affect decision-making given that, as established by the Law on Latvijas Banka , in the event of a tie, the casting vote belongs to the chair of the meeting. 1.3 As noted in the consultation request, the ECB was previously consulted on the draft law and adopted an Opinion thereon on 8 January 2026 . As stated in the consultation request, the ECB should be reconsulted – according to the Guide to consultation of the European Central Bank by national authorities regarding draft legislative provisions – in relation to those amendments where, in exceptional cases, the draft legislation has undergone substantial changes of a non-technical nature as compared to the version on which the ECB was previously consulted . The draft amendment is

text: indeed substantial in nature and, also considering it concerns Latvijas Banka, requires that the ECB be further consulted.

text: 2. General observations

text: 2.1 The ECB recalls that it has previously opined on the reduction of the number of Council members, from eight to six, in 2016 . 2.2 The ECB notes that the Council is Latvijas Banka’s sole decision-making body . It thus takes decisions on behalf of Latvijas Banka which ensure the implementation of Latvijas Banka’s tasks, including those related to the European System of Central Banks (ESCB) and the Single Supervisory Mechanism (SSM). 2.3 The draft amendment does not raise personal independence concerns regarding the tenure of office of the Council members in view of the fact that the post to be removed by the draft law is currently vacant . 2.4 The ECB understands that Latvijas Banka’s stance is that that the current composition of the Council of six members, including the Governor and the two Deputy Governors, will be adequate and necessary for the successful performance of Latvijas Banka's functions. Those functions include ESCB and SSM-related tasks, as well as the new task attributed to it by the draft law designating Latvijas Banka as the resolution authority for insurance and reinsurance undertakings. 2.5 The ECB relies on Latvijas Banka’s assessment that the proposed reduction in the number of Council members will have no impact on Latvijas Banka’s ability to successfully perform all functions and tasks of Latvijas Banka, including ESCB and SSM-related tasks.

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 31 March 2026.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE

type: vagledning

utgivare: ecb