Government drops extra tax on banks after court rules it unconstitutional
It's one of the new things in the proposed State Budget for 2026: the extra solidarity tax on banks is gone. The government will no longer get €40 million in annual revenue.
The additional solidarity tax levied on the banking sector will finally be eliminated after the Constitutional Court declared it unconstitutional. The measure generated €40 million in revenue per year for the state coffers.
The rule repealing the banking surcharge is included in the 2026 State Budget proposal that the Government submitted to Parliament on Thursday.
Introduced in 2020, the banking surcharge was intended to finance the Executive’s response to the crisis caused by the Covid-19 pandemic. The emergency has passed, but the tax has remained in place until now, with banks contesting the decision in court.
In recent years, there have been a number of decisions in favour of the sector (more than three dozen, including judgments and summary decisions), which led the Public Prosecutor’s Office to request the Constitutional Court to review the so-called Solidarity Surcharge on the Banking Sector.
In June, the Constitutional Court declared the measure illegal, considering that the regime “violates the principle of prohibition of arbitrariness, as a requirement of tax equality”, as well as “the principle of contributory capacity”.
As a result of this decision, the Government was obliged to return to the banks the approximately €180 million unduly charged over the last five years.
