B Law & Tax
14 September 2023

Tax advisor: The National High Court rejects the suspension of the Temporary lien of credit entities and financial credit establishments

The Contentious-Administrative Chamber of the National High Court has rejected the request to temporarily suspend the Temporary lien of credit entities and financial credit establishments (also called “extraordinary tax on banks”) filed by Sabadell, Bankinter and Kutxabank (through its subsidiary Cajasur). Furthermore, in their decisions, they have also ruled out the possibility of consulting the Court of Justice of the European Union on the validity of this tax. Despite this refusal, the process continues its course, since the National Court has not stopped the payments of the temporary tax, which was approved by the Government in December 2022.

These three banks had challenged the order of the Ministry of Finance establishing the procedures for the advance payment of this tax and had requested its suspension while the case was being resolved. In addition, other banking associations also questioned this tax, but decided not to request its suspension, since they did not have the possibility of appealing the assessments directly.

This tax also affects other sectors, such as the energy sector and large fortunes. The National Court considers that compliance with this ministerial order would not cause irreversible economic damage that would endanger the survival of the companies affected by this temporary tax, so they see no reason to suspend it.

The Chamber has pointed out that, in the event that the appeal is resolved in favor of the financial entities, the current situation could be reversed without problems through the return of the amounts paid, together with the required interest, by means of the necessary compensations.

It is relevant to highlight that this decision is known precisely when the entities are on the deadline to make the payment corresponding to the second half of what they must pay for the fiscal year 2022. This payment must be made between September 1 and 20, both for banking institutions and for companies in the energy sector. The banking tax levies 4.8% on the interest and commissions of banks that generated more than €800 million in turnover in Spain during 2019. For its part, the tax on energy companies levies 1.2% on the amount of business of companies that invoiced more than €1 billion in 2019. The government’s plan is to collect approximately €3 billion for each of the two years that this tax is initially expected to be in force.

In February, banks disbursed €637.1 million as the first payment of the temporary tax, while large companies in the energy sector paid €817.4 million in total for the prepayment, an amount that the affected companies were required to make by February 20.

B Law & Tax International Tax & Legal Advisors.


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