Spain’s Senate gave final approval on Wednesday to a windfall tax on banks and big energy companies, designed to ease the cost-of-living crisis, though it largely left out smaller local institutions and energy units. of foreign banks in the country.

The bank tax imposes a 4.8% charge on net interest earnings and net commissions from banks above a threshold of 800 million euros ($849 million).

For energy companies with a turnover of at least 1,000 million euros, excluding national regulated business and operations abroad, the rate is 1.2%.

After the bill cleared the first hurdle in Congress last month, the lower house introduced some corrections, reimposing the 800 million euro threshold as originally planned by the government, although the version approved by Congress called for that all banks supervised by the European Central Bank will pay.

Since the bill has passed without any changes, the approval of the upper house is final.

Banks and companies have opposed both bank and energy taxes, threatening to challenge the new tax regime in court.

The vast majority of Spanish units of foreign banks, such as Deutsche Bank, will not be taxed unlike an earlier version of the draft that was approved in November.

However, BNP Paribas in Spain could be subject to the tax depending on the perimeter of the business that will be taxed.

The government put forward the original proposal to create the temporary tax on banks and big energy companies in July to raise a total of 7 billion euros by 2024 to finance measures to ease cost-of-living pressures.

The energy proposal was meant to raise 4 billion euros, but the Bank of Spain recently estimated that it would only raise 2 billion euros after its regulated domestic activities and foreign operations were left out of the levy.

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