consolidated annual report - Gruppo Banca Sella

7.5 Changes in liabilities for deferred taxation
2004 2003
1. Opening balance as at 31/12/2003 402 615
2. Increases 912 197
2.1 Deferred taxes arisen during the year 912 150
2.2 Other increases - 47
3. Decreases 183 410
3.1 Deferred taxes annulled during the year 182 409
3.2 Other decreases 1 1
4. Closing balance as at 31/12/2004 1.131 402
The above mentioned changes have income statement impact. No assets for deferred taxation having net balance sheet impact were recorded.
Changes in caption 80/d “Provisions for risks and charges - Other provisions”
Balance as at 31/12/2003 28.117
decreases
- Used to cover charges resulting from claims by receivers of bankrupt customers 1.285
- Used to cover depreciations of securities portfolio 771
- Used to cover charges of different nature 2.131
- Transfer to out-of-period income of the exceeding part 1.086
- Transfer to out-of-period income of the exceeding part Sella Bank Luxembourg S.A. 6.951
- Other variations 46
increases
- Provisions charged to income statement for risks related to Sella Bank Luxembourg S.A. 1.675
- Provisions charged to income statement for reimbursement of benefits deriving from law by decree 153/99 1.511
- Provisions charged to income statement 6.794
- Other variations 186
Balance as at 31/12/2004 26.013
It was not deemed necessary to make any provisions following sentence No. 425 of 09/10/2000 of the Constitutional Court, which ratified the illegitimacy for excess of proxy of art. 25
par. 3 of Law by Decree 342/99, the content of which guaranteed the validity of clauses relating to capitalization of interest of contracts outstanding at the date in which deliberation
CICR of 09/02/2000 was put into force. The Council of State, with the above mentioned sentence has not judged the issue, but pointed out the inadequacy of the proxy law as source
of the regulations for the issue of the disposition thereof.
Therefore the Group, as regards interest due on interest, on the basis of the scholars’ and the courts’ past and recent guidelines and of well-grounded objective elements, holds fully
valid the clauses relevant to capitalization of interest written in the contracts for current accounts and the procedures followed, and holds groundless any request for reimbursement
that customers may put forward.
With decision C (2001) 3955 of 11/12/2001, the European Commission stated that Law by Decree 153/99 (known as “Ciampi law”) is identified as “State aid” and therefore is not
compliant with EC rules. The Italian Government (Law by Decree 63/2002) in part applied the EC Decision suspending the application of the Law by Decree starting from year 2001.
With Law by Decree 282/2002 the Government requested the disbursement of an amount equal to the taxes not paid as a consequence to such regulations and relevant to tax periods
in which such regulations were applied.
Banca Sella, as well as other main Italian banks, has assigned the Italian Banking Association (ABI) the mandate to appeal to the relevant European Court. Such appeal was deposited
on 21/02/2002 with the Court of First Instance of the Community (case T-36/02). The Italian Government also has opposed such Decision by applying to the Court of Justice of the
Community (case C-66/02).
A court order of 09/07/2003 of the Court of First Instance declared the suspension of the proceedings begun by ABI (case T-36/02) until the European Court has delivered its judgement
on case C-66/02.
On 03/02/2005 case C-66/02, which sets the Italian Government against the European Commission, was heard before the European Court, sitting in open court. The sitting was heard
together with the hearing of case C-184/04 relevant to some preliminary questions raised by the Tax Committee of the province of Genoa in order to issue its final judgement on the
appeal deposited by a main Italian bank. The Italian Government Counsel repeated the defense made in the already deposited memorials, confirmed its favourable support to the
presence of the bank in the lawsuit, concluded insisting on the annulment of the Decision of EU Commission of 11/12/2001. It is to be pointed out that the publication of the decision
of the European Court will take at least 10 months from the day of the sitting in open court which took place on 03/02/2005.
Gruppo Banca Sella in previous financial years benefited of tax reliefs as provided for by Law by Decree 153/1999, for a total amount of about € 1,2 million. The Group thought,
coherently with the judicial action in which it is involved, not to disburse the amount requested, because of the fact that there are well-grounded reasons to believe that the benefits
may not be identified as “State aid”. Such tax regulations, indeed, (i) are not selective and do not identify an ad hoc aid; (ii) they neither distort nor menace competition inside the
European Union, also considering that Italian banks are damaged by a higher taxation than other member Countries; (iii) they do not influence international trade among member
countries. Nevertheless, even though such benefits were identified as “State aid”, it is deemed that the same are nevertheless due, on the basis of the fundamental principles of the EU
regulations on legitimate expectations and proportionality.
On the prudence principle the Group has however deemed to allocate to “provision for risks and charges - other” (item 80/d of the Balance Sheet) an amount of € 1,5 million entered
at item “provisions for risks and charges” (item 100 of the Income Statement). Such provision includes both tax reliefs benefited in previous financial years and interest and sanctions
provided for by law by decree 282/2002.
Consolidated annual report 2004 - 245