Spanish banking lobby to challenge new tax in court

MADRID (Reuters) - The Spanish Banking Association will legally challenge the country's new banking tax, the lobby's head, Alejandra Kindelan, said on Thursday, adding that the levy represented a burden of 2 billion euros ($2.21 billion) on the sector.

In 2024, Spanish lawmakers approved the government's new tax plans, which included extending a modified temporary levy on banks by three years.

"The time has come to ask the government if they are going to remove this tax on banking and, as I fear the answer, what we are going to do on our part is to appeal the tax," Kindelan said, adding that the association would challenge part of its implementation.

Ranging between 1% and 7%, it taxes lenders' net interest income and commissions in accordance with their lending income volumes. For lenders whose annual volumes surpass 5 billion euros, it sets a rate of 7%, affecting Santander, BBVA and Caixabank.

"In the current context, it is clearer than ever that this tax represents a burden on the Spanish banking sector alone, amounting to 2 billion euros over three years," Kindelan said.

($1 = 0.9031 euros)

(Reporting by Jesús Aguado; Editing by David Latona)