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Saturday, 20.04.2024, 16:15
Estonian Banking Association wants 5 mln euros tax exemption for profits of small banks
Erki Kilu. Photo: lhv.ee. |
Erki Kilu, chairman of the board of the Estonian
Banking Association and CEO of LHV
Pank, said at the presentation of the association's strategy on Tuesday
that the arrangement of the advance income tax for banks whereby banks not
paying a dividend must pay income tax is burdensome on small and growing banks,
while supporting mature banks.
"The
advance income tax for banks undermines banks' competitive situation,
undermining in the first place the ability of rapidly developing, local-equity
banks to grow and finance the economy," Kilu said.
He said the
association has made a proposal to introduce with an amendment to the Income
Tax Act an additional deduction in the amount of up to 1.25 mln euros from the
quarterly amount that serves as the basis for taxation, in the total amount of
up to 5 mln euros per year.
Under the
new income tax regulations valid for banks since 2016, banks must pay an
advance income tax starting in 2018 equaling 14 percent of the profit earned by
them in the previous quarter.
The
Estonian Banking Association is an organization representing 12 banks
active in Estonia which is a member of the European Banking Federation.