According to the dispatch of 14 February 2018 on the Federal Act on the calculation of the participation deduction for too-big-to-fail instruments, the calculation of the participation deduction for group parent companies of systemically important banks is to be corrected selectively.
According to the message, the too-big-to-fail regime (TBTF regime) may make it necessary for banks to issue so-called TBTF instruments to strengthen their capital base or to create additional loss-absorbing funds. Systemically important banks must issue such funds from 2020 at the latest via their group parent company, which will regularly pass on the funds from these funds within the group. Under current law, this activity potentially results in a higher income tax burden on investment income for the group parent company. This makes it more difficult to build up equity capital. This contradicts the objectives of the TBTF legislation. The proposal therefore corrects the calculation of the participation deduction for group parent companies of systemically important banks and thus the potential higher burden.
The National Council discussed the dispatch on 20 September 2018 and unanimously approved the Federal Council's draft
The entire parliamentary business (18,020) as well as the minutes of the National Council are available here.
