CONTACT US

For any general inquiries, please fill in the following contact form:

Our websites never use cookies or other technologies such as pixel tags and web beacons. We only retain personal information when the contact section of our websites is filled. To proceed and get in touch with us through this format please read our Terms & Conditions, updated to be in line with the provisions of the GDPR, and tick this box to consent in us retaining the above information for contacting purposes only.

SUBMIT

Brexit Puts Financial-Trade Tax on Ice as Banks Start Moving

Brexit Puts Financial-Trade Tax on Ice as Banks Start Moving

By Alexander Weber

and Mark Deen

A six-year push to impose a tax on financial transactions in Europe may have run its course, with Germany and France dragging their feet as they prepare for Brexit and a redrawing of the financial map that has already begun.

French Finance Minister Bruno Le Maire said earlier this month that Brexit could bring “thousands of jobs to Paris,” an opportunity that could be lost if the tax were imposed. His German counterpart, Wolfgang Schaeuble, said that “quite a bit speaks in favor of the French argument to look first at how the Brexit negotiations are going.”

With the heavyweight boosters among the 10 countries pursuing the tax getting cold feet, the plan’s future looks bleak.

“Some had said Brexit could prompt further interest” in the financial-transaction tax, said Dan Neidle, a partner at Clifford Chance in London. “In fact it looks like the opposite is the case. Brexit has prompted impressive efforts from the French and others to attract the financial sector -- those efforts would be completely undermined by the FTT.”

The European Commission, the EU’s executive arm, proposed the tax in 2011 to make sure the industry made a “fair contribution” after taxpayers bore the costs of the financial crisis. When some member states opposed the levy, a smaller group sought a compromise under “enhanced cooperation” rules. Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain are still at the table.

Will Brexit Trigger Exodus of Banks From London?: QuickTake Q&A

A decision to impose the tax could benefit Ireland and Luxembourg, which have also actively courted the big banks and are not part of the group pursuing the tax

Finance ministers of the 10 nations haven’t met in months after they hit a snag over the treatment of pension funds. Other open issues include intra-group transfers, tax rates and collection methods, according to an internal document seen by Bloomberg. The scope of the tax also remains to be worked out, the paper states.

Governments have recently grown increasingly wary of pushing the tax while banks in the U.K. are deciding where to move staff to keep servicing clients inside the single market. President Emmanuel Macron’s new French administration has also changed gear and made luring firms to Paris a priority.

“Sure I want the tax, I just want us to take into account this change that is the U.K. exiting the EU,” Le Maire said. “And I want these decisions to be taken collectively.”

Schaeuble said the pause “doesn’t mean a suspension until the end of the Brexit negotiations, but one should be a bit more generous on the time horizon.” German politicians are already pushing to relax the country’s restrictive labor laws to make it more appealing to foreign banks.

https://www.bloomberg.com/news...

MORE NEWS

British stockbroker at centre of £940m money-laundering investigation allegedly involving ...

British stockbroker at centre of £940m money-laundering investigation allegedly involving Venezuela's president
A British stockbroking firm is embroiled in a $1.2billion (£940million) Venezuelan money-laundering scandal. Fake investment schemes and a ...

Macron scraps fuel tax rise in face of gilets jaunes protests

Macron scraps fuel tax rise in face of gilets jaunes protests
French government drops measure from budget after weeks of protests that left parts of Paris in flames.The French government has bowed ...

Panama Papers: Four charged in US with fraud and tax evasion

Panama Papers: Four charged in US with fraud and tax evasion
Four men have been charged in the US with fraud and tax evasion in connection with investigations prompted by the leaked Panama Papers. ...

Who's behind the blog

Who's behind the blog

SOCIAL MEDIA