Six large banks in Spain paid 12,552 million euros in taxes for 2023, primarily through corporate tax payments in the first quarter, alongside the extraordinary tax already settled. That amount is measured against the previous year, with an additional 1,120 million euros attributed to the extraordinary levy. The government justified this special tax by noting higher sector profits driven by the European Central Bank’s rate hikes. At the consolidated level, listed banks allocated 11,432 million euros to corporate payments last year, up 17.4% from 9,736 million euros in 2022, with Unicaja also included in the calculation. The extraordinary tax was approved in principle for two years, and the administration subsequently extended it through 2024. Financial sector forecasts anticipate that banks will owe up to 1,493.5 million euros this year for last year’s extraordinary profits, implying an approximate 30% rise.
Among the major banks, CaixaBank is projected to bear the largest share of this tax in 2024, with estimates suggesting up to 500 million euros. Banco Santander is expected to pay as much as 338.5 million, Sabadell around 190 million, and Bankinter between 90 and 100 million. Unicaja could face a similar range of 90 to 100 million. In addition to the special tax, higher interest rates and renewed banking activity have boosted sector profits and the taxes paid by institutions. A spokesman for the Spanish Banking Association, José Luis Martínez, noted that these tax payments, along with other levies, position Spanish banks as leading contributors to public coffers. He also emphasized that the welfare state benefits from this contribution, underscoring the role of banking in supporting public services.
Bank profits reached 26,336 million euros for listed banks, a rise of 26.32% versus 2022. This growth occurred amid heightened political discourse, with critics from the more radical factions of the government arguing that profits were excessive. Ione Belarra, general secretary of Podemos, announced that her party would propose to the Minister of Economy, Trade and Business Carlos Body a strengthening of the extraordinary banking tax so that half of each bank’s profits would be captured over the next six years.
Banks challenge the tax in court
The extraordinary tax, introduced by the Pedro Sánchez administration in July 2022 to tax windfall profits arising from higher rates, faced legal challenges from the financial sector. Industry representatives argued that margin gains did not match overall profitability, and warned that continued imposition of a special tax on banking could be detrimental to the Spanish economy and its financial sector. José Luis Martínez, a spokesman for the Association of Spanish Banks, asserted that while higher rates boosted profits, profitability did not fully cover the sector’s cost of capital. He noted that Spanish banks’ profitability trails behind many European peers.
The tax is paid in two installments: the first in February and the second in September. Each payment represents half of the estimated amount, with annual accounts allowing for adjustments after final accounts are approved. Although the tax has been extended temporarily for 2023 and 2024, the government has signaled an aim to make it permanent. In an interview with Prensa Ibérica, Economy Minister Carlos Body argued that the tax did not prevent the sector from achieving record profits.
Related developments involved discussions with various organizations after a change in government, with some calling to modify the tax to address perceived discriminatory elements. The current framework excludes entities earning less than 800 million euros in interest margins and net commissions, favoring larger banks operating in Spain. The Ministry of Finance estimates approximately 3 billion euros in revenue from extraordinary banking taxes and energy sector taxes, though these figures remain provisional. In banking, the tax is likely to rise, whereas profit declines in the energy sector could reduce related revenue. Last year, banking tax receipts stood at 1,263 million euros, which is less than half of the combined 2,900 million euros collected alongside the energy tax.