SHARE
COPY LINK

EUROPE

Germany ready to impose financial transaction tax

Germany is prepared to introduce a tax on financial market transactions on its own if it is unable to bring its European partners on board, according to Finance Minister Wolfgang Schäuble.

Germany ready to impose financial transaction tax
Photo: DPA

Asked about financial market regulation, Schäuble said late Wednesday: “Of course it would be better on a global level and if it doesn’t work at a global level, then at a European level, and if that doesn’t work, then at a national level. That goes also for a tax on financial transactions.”

In September, Europe went ahead with landmark proposals to tax the financial sector, ignoring US opposition in a move that also provoked grumblings in London which fears capital flight from the City.

The idea of a tax on financial market transactions has been pushed hard by German Chancellor Angela Merkel and French President Nicolas Sarkozy. The plan will likely be discussed at a summit of all 27 European Union heads of state and government at an October 23 summit, and also be put to a summit of G20 leaders in Cannes on November 3-4.

European Commission president Jose Manuel Barroso has said the tax could generate around €55 billion ($76 billion) a year.

Speaking to members of Merkel’s conservative Christian Democrats, Schäuble also insisted that Greece’s debt needed to be reduced to a more sustainable level.

“If Greece’s debts are not sustainable in the long-term – and it seems that they are not – they need to be reduced to make them sustainable and that’s what we have been discussing in recent days,” he said. “I know that the markets do not like that, but there is no alternative.”

He added that private investors must take heavier losses in a second bailout plan for Greece, without mentioning a level for such a write-down, as speculation swirls of a “haircut” as high as 60 percent.

AFP/mry

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

CROSS-BORDER WORKERS

Germany and France extend Covid tax breaks for cross-border workers

Germany and France have agreed to extend the relaxation of tax rules for cross-border workers until the end of the year.

Cross-border workers commute by car but they can for now continue to work at home
Cross-border workers usually have to commute but can for now continue to work at home.. Photo: Fabrice Coffrini / AFP

The agreements between France and the governments of Belgium, Luxembourg, Germany, Switzerland and Italy avoids double taxation issues for anyone travelling across the French border to or from those countries in order to work.

During the pandemic, tax rules were eased to allow French cross-border employees, like their counterparts in Belgium, Luxembourg, Germany, Switzerland and Italy, to work from home without having to change their tax status.

The deals, which were established at the beginning of the health crisis in March 2020, were due to end on September 30th – and would have plunged cross-border workers still working from home because of the health crisis into renewed uncertainty over their taxes.

The latest extension of these agreements means there’s no confusion over where a cross-border worker pays their taxes until December 31st – for example cross-border workers who work in Geneva but live in France, who normally pay their taxes and social security contributions in Switzerland. 

Under normal circumstances, anyone living in France who works in Switzerland can spend no more than 25 percent of their time working from home. If they exceed this time limit, they would have to pay these tax charges tin France rather than in Switzerland, which would be much higher.

The agreements between France and Belgium, Luxembourg, Germany and Switzerland “provide that days worked at home because of the recommendations and health instructions related to the Covid-19 pandemic may … be considered as days worked in the state where [workers] usually carry out their activity and therefore remain taxable,” according to the statement from the French Employment Ministry.

In the case of Luxembourg, days worked from home because of the health crisis are not counted in usual the 29 day limit.

SHOW COMMENTS