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Quarter of German firms ‘cutting jobs in 2013’

More than a quarter of German companies have said they would likely be cutting jobs in the coming year, as business confidence plummets, a report published Monday revealed.

Quarter of German firms 'cutting jobs in 2013'
Photo: DPA

The survey of about 2,300 firms pointed to a more pessimistic mood among German employers, with nearly 28 percent saying they were planning to shrink staff numbers in 2013, and just under 20 percent planning on expanding their work forces.

The Cologne Institute for Economic Research (IW) found out that 30 percent of businesses said their position was “worse than the previous year.” This was 18 percent at the start of 2012.

Faltering foreign business and the associated limitations on production were making companies “markedly more cautious,” concluded the IW.

For the first time since autumn 2008, more employers are expecting their production levels to fall than to rise. In the spring almost 40 percent were predicting production increases – a figure which by November had fallen below 17 percent.

In anticipation of a difficult business climate, many had curbed their investment plans. The number of companies in western Germany with planned reductions has almost doubled over the course of the year with a third planning to cut outlay.

“Export-intensive enterprises are being burdened by the sharp slowdown of the global economy, in particular by the recessionary trends in many European countries,” IW director Michael Hüther told the Frankfurter Allgemeine Zeitung.

The country could avoid outright recession but growth figures did not appear encouraging. IW’s 2013 growth forecast of 0.75 percent falls even below this year’s figure of just under 1 percent.

A further escalation of the eurozone debt crisis could derail even these modest projections.

Hüther urged politicians to do everything possible to support businesses. “This includes doing without taxation hikes, using all available means to curtail social security expenditures, the continued development of infrastructure, and a convincing solution for Germany’s energy transition,” he told the paper.

The authors of the report noted that the German economy – despite often appearing to represent an “island of bliss” in the European debt crisis – may not be invincible after all.

DAPD/The Local/pmw

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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.

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