EBA · 2021_6086 Final Q&A

Available stable funding factor (ASF) applicable to current tax liabilities in the NSFR

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
428j, 428k, 428l, 428o
Topic
Liquidity risk
Submitted by
Competent authority
Submitted
2021-07-13
Answered
2022-09-30
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

What should be the available stable funding factor applicable to current tax liabilities?

Background

According to IAS 12, “current tax for current and prior periods shall, to the extent unpaid, be recognised as a liability”, and “shall be measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period”.    While the NSFR provisions in the CRR provide a specific treatment for deferred tax liabilities, i.e. they should be treated according to the nearest possible date on which they could be realised, it does not provide an explicit treatment for current tax liabilities.

Answer

Regulation (EU) 575/2013 as amended (CRR) states in Article 428k(1) that a 0% ASF factor is applicable to all liabilities without stated maturity, unless otherwise mentioned in articles 428l to 428o. In the same Article 428k a specific is treatment prescribed for deferred tax liabilities. As current tax liabilities are not mentioned anywhere, a 0% ASF factor applies.

Original source: European Banking Authority, Q&A ID 2021_6086

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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