Spanish banks have agreed to pay a record $1.3 billion in tax in a deal that would allow them to receive a boost in the form of a tax holiday.
Bloomberg News reports that the banks have already reached an agreement with the government on the tax bill that will bring Spain’s total to $2.3 trillion in taxes.
In a separate development, the Spanish government has announced that the country’s banks will receive tax breaks worth $6 billion, or 1.3% of their assets.
Spain’s biggest bank, Santander, and other big Spanish banks, including Bankia, BBVA, UniCredit, Bankia and BNP Paribas, will be able to receive relief on their taxes, and the rest of the country will not get the same amount of relief.
In exchange for the tax relief, the government is expected to increase its tax burden on Spain’s biggest companies and pension funds, which are currently receiving tax breaks.
Spain has also decided to lower its corporate tax rate to 11% from 13% for the next five years, according to Bloomberg News.
Spain is one of the largest European economies, accounting for about 15% of the EU’s gross domestic product.