Budget 2014: Government could change tax rules for bailed-out banks
THE Government could change tax rules in the budget to let bailed out banks use more of their past losses to reduce their future tax bills.
The Department of Finance is considering reversing a 2009 law that limits bailed-out banks’ ability to use past losses to save on tax, according to the Bloomberg news agency.
The rules only apply to banks that were partially recapitalised by transferring property loans to the National Asset Management Agency (NAMA).
They would allow bailed out banks to use more of their so called “deferred tax assets” to be used to off set future profits when the banks pay tax.
The scale of the Irish bank’s historic losses means it would have significant implications for AIB, Bank of Ireland and Permanent TSB, which are the banks affected.
Under the 2009 rules the three banks will pay tax on at least half their future Irish profits, no matter how big their historic losses were.