Italy shocks banks with a 40% windfall tax for 2023

Italy has dealt a sudden blow to its banks as Italy will tax 40% of net national income earned in 2022 or 2023 depending on the larger amount and targets the annual increase above the specified thresholds of at least 5% for 2022 and 10% for 2023.

Sharply higher official interest rates have resulted in record profits for banks as the cost of loans has risen while lenders have refrained from paying more on deposits as countries such as Spain and Hungary have already imposed windfall taxes on the sector and others may now follow suit.

"One only has to look at the first-half profits of the banks to realize that we are not talking about a few million but about billions," Deputy Prime Minister Matteo Salvini said. Definitely doubled.