STOCKHOLM: Some European countries have imposed windfall taxes on banks’ profits to help fund their response to the cost of living crisis.

Below is a snapshot of the status of windfall taxes or bank-specific duties across European countries in alphabetical order:

CZECH REPUBLIC: The Czech state will collect revenue in the single billions of crowns from a windfall tax on banks this year, less than initially forecast, Czech Television reported, citing Finance Minister Zbynek Stanjura.

The Czech lower house of parliament approved last year a 60% windfall tax on energy companies and banks to fund help for people and firms hit by soaring electricity and gas prices.

FRANCE: President Emmanuel Macron said in March that companies with more than 5,000 people should share more of their “exceptionally high” profits with employees instead of buying back shares. But he and Finance Minister Bruno Le Maire ruled out the possibility of a windfall tax.

That is because French banks are subject to an anti-usury law that limits the pace of quarterly growth in loan prices.

France also has a popular regulated savings scheme, which accounts for almost 20% of bank deposits, with an inflation-linked return that adjusts more quickly than loan rates.

GERMANY: For some of Germany’s biggest banks, net interest income has risen between 50% and 70% from lows during the COVID-19 pandemic, but a windfall tax has not been a topic for discussion under pro-business Finance Minister Christian Lindner.

Germany’s finance ministry declined to comment on Italy’s move in August but noted that tax increases are ruled out under a German coalition government agreement.

HUNGARY: The Hungarian government has tweaked windfall taxes imposed on key sectors of the economy in a decree published in June, saying banks can reduce their 2024 windfall tax payments by up to 50% if they increase government bond purchases.

It also imposed a 13% “social tax” on certain types of investments, including investment notes and interest rate gains on bank deposits.

ITALY: Italian financial institutions have put away at least 4.5 billion euros ($4.8 billion) to avoid an extraordinary tax the government imposed on the sector in August, making use of a clause Rome introduced in September to allow lenders to boost cash reserves instead of paying the levy.

Italy in August announced a surprise 40% tax on banks’ net interest margin (NIM), later giving lenders the option of strengthening capital by an amount equivalent to two-and-a-half times the tax.

The European Central Bank (ECB) had criticised the proposed tax in a non-binding legal opinion in September, saying the measure did not consider lenders’ long-term prospects and could make some of them vulnerable to an economic downturn.

LITHUANIA: Parliament gave approval in May for a windfall tax on the banking industry’s net interest income for 2023 and 2024 after a sharp rise in European Central Bank interest rates.

The 60% levy on the part of net interest income that exceeds the average of the previous four years by 50% was expected to raise 410 million euros ($451 million) for the government’s budget to be used to boost the military.

SPAIN: Spain intends to raise 3 billion euros by 2024 from the windfall tax on banks it approved last year. The tax imposes a 4.8% charge on net interest income and net commission above a threshold of 800 million euros.

SWEDEN: The Swedish government imposed a “risk tax” in January last year for institutions with Swedish-linked liabilities of more than 150 billion Swedish crowns ($14.1 billion) to strengthen public finances and create space to cover the costs that a financial crisis could cause.