By Jesús Aguado
MADRID (Reuters) -Spanish banking associations have lodged appeals against the government’s windfall tax at the High Court, they said on Wednesday, following claims the levy distorts competition.
In December, Spain approved a temporary levy on banks that intended to raise 3 billion euros ($3.2 billion) by 2024 to fund measures to ease cost of living pressures.
The Spanish Banking Association (AEB) and the association of former savings banks (CECA) said in a statement, confirming an earlier Reuters report, they had lodged two appeals before Spain’s High Court “challenging the ministerial order (…) of the new bank levy.”
Neither of the associations, which represent some of Spain’s biggest banks, including Santander, Caixabank and BBVA, nor Spain’s High Court provided further detail.
The associations appealed because they consider the levy contravenes rules for a level playing field in Europe and distorts competition, two sources with knowledge of the matter said. They asked not to be named because they were not authorised to speak to the press.
In November, the ECB also said potential adverse effects could include a higher cost of credit for clients.
An alternative way to challenge the tax levy would be a direct appeal against the tax authorities to reclaim the money once they have made their first payment, due before Feb. 20.
But the associated legal proceedings could take 18 months to reach the High Court, one of the sources said, adding that this path was still open to the individual lenders despite the associations’ High Court action.
Companies can appeal within four years against the tax office and have two months to appeal the order, the sources said.
So far, only Bankinter has publicly said it would separately challenge the levy, while lenders, such as Santander and BBVA have said they would consider doing so.
The government introduced the proposal to create a temporary levy on banks and large energy companies in July to raise a total of 7 billion euros by 2024.
Analysts, lenders and utilities have said that the tax could have an impact of hundreds of millions of euros on their revenues or lending.
The association for Spanish oil companies (AOP) on Wednesday said it had no plans to challenge the tax, while the association for power companies AELEC was not immediately available to comment.
Among individual oil companies, Cepsa said it planned to challenge the tax on energy companies.
Iberdrola’s Chief Executive Officer Ignacio Sanchez Galan said in October the company would defend shareholders’ interests in court.
($1 = 0.9368 euros)
(Reporting by Jesús Aguado, editing by Inti Landauro and Barbara Lewis)
