Bank deposit levy

A bank deposit levy is a taxation on bank deposits, effectively a tool for the government to obtain funds from accounts held in banks within its jurisdiction.

On 16 March 2013, during the 2012–2013 Cypriot financial crisis, the EU and IMF agreed on a €10 billion deal with Cyprus,^[1] which included a one-time levy of 6.7% for deposits up to €100k and 9.9% for larger deposits, on all domestic bank accounts, with account holders to be compensated by bank stock equivalent to the levied amount.^[2][3] The Cypriot parliament rejected these terms, and on 25 March, Cyprus President Nicos Anastasiades, Eurozone finance ministers, and International Monetary Fund officials announced an alternative which would preserve all insured deposits, of €100k or less, without a levy, but will shut down the Cyprus Popular Bank, its second largest bank also known as Laiki Bank, levying all uninsured deposits there, and levying 40% of all uninsured depositors elsewhere, mostly wealthy Russians who use Cyprus as a tax haven. The revised agreement, expected to raise €4.2bn in return for a €10bn bailout, does not require the approval of the Cypriot parliament.^[4][5]

References