Finance

Finance

Germany to apply bank tax

01 April 2010 08:52 (UTC +04:00)

Baku â€“ APA-Economics. The German cabinet agreed in principle on Wednesday to impose a tax on banks to help finance any future bailouts, but it left details of the plan to be worked out in legislation that would be forthcoming in a few months, New York Times reported.

As the government prepares to draft the cornerstones of its plans for a new bank tax, it is already considering ways of preventing financial institutions from including the levy in their tax-deductible businesses expenses, as this would dramatically reduce the amount of revenue generated.

The government reportedly intends to consider the proposed tax in the same light as a â€œcriminal levyâ€ (Strafabgabe) or fine. According to article 10 of the countryâ€™s corporate tax law, such levies, of a punitive nature and serving to fulfil certain conditions or instructions, are non tax-deductible.

Germanyâ€™s Finance Minister Wolfgang SchÃ¤uble has already put forward the idea of using the balance of a bank as a basis for calculating the tax, once customer deposits and equity have been deducted.