The Commission has opened a formal investigation under State Aid rules into the provision of Italy's 2004 Finance Law that allows former state-owned banks to release hidden capital gained during their corporate restructuring in the 1990s by paying a nominal tax of 9% in lieu of the ordinary company tax of 37.25%.

The Commission calculated that the difference between the ordinary company tax and the tax actually paid by the banks under scrutiny amounted to over €586 million. This could have a detrimental effect on competition in the current context of financial services markets undergoing consolidation in Europe. The investigation will allow interested parties to comment on the measures under scrutiny.

A copy of the press release is available at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/737&format=HTML&aged=0&language=en&guiLanguage=en.