Addressing Tax Risks Involving Bank Losses

image of Addressing Tax Risks Involving Bank Losses

The financial and economic crisis had a devastating impact on bank profits, with loss-making banks reporting global commercial losses of around USD 400 billion in 2008.  This comprehensive report sets the market context for bank losses and provides an overview of the tax treatment of such losses in 17 OECD countries; describes the tax risks that arise in relation to bank losses from the perspective of both banks and revenue bodies; outlines the incentives that give rise to those risks; and describes the tools revenue bodies have to manage these potential compliance risks. It concludes with recommendations for revenue bodies and for banks on how risks involving bank losses can best be managed and reduced.



Compliance/tax risk issues for revenue bodies in relation to bank tax losses

This chapter identifies the main compliance and tax risk issues for revenue bodies in relation to bank tax losses. It first gives an overview of the tax risks involving bank tax losses, and the incentives which give rise to those risks. It then describes the key tax risks in some detail, including a number of illustrative examples. Tax risks covered include risks relating to non arm’s-length transfer pricing, corporate reorganisations, financial instruments, and the possible circumvention of loss recognition and relief rules.


This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error