No deferred tax change plan for banks

The Government is not planning to reclassify banks’ deferred tax assets as tax credits in an effort to boost their capital positions.

The Spanish government announced on Thursday that it was looking into legislative changes that would enable Spanish banks to covert some of the estimated €50bn in deferred tax assets (DTA) into tax credits.

DTA enable a bank to write off losses against future tax bills when the bank returns to profitability. Bank of Ireland has €1.5bn in DTA and AIB holds €3.5bn.