France to introduce super-tax on bankers

| December 16, 2009 | 0 Comments
France to introduce super-tax on bankers

French Finance Minister Christine Lagarde has today unveiled details of a 50% tax on bankers’ bonuses.

After a cabinet meeting today, Ms Lagarde told reporters that a bill detailing the new tax would be presented to parliament early in the New Year.

Any bonus above €27,500 (£24,000) will be taxed at a rate of 50% on payments given out in 2010, said Ms Largarde.

The move follows a similar measure announced by UK Chancellor Alistair Darling last week in his Pre-Budget Report.

Mr Darling confirmed there would be a one-off 50% tax on bankers’ bonuses paid above £25,000.

The Chancellor said the banks, rather than the bankers, will pay the tax and the temporary measure will come into effect immediately and will be used to claw back some of the bailout funds used to rescue the banking industry.

However, the new measures met with criticism in the UK and in France. The UK warned that the tax would harm the City’s reputation as one of the world’s largest financial centres.

Meanwhile in France, the French Banking Federation said the French banking system had weathered the financial crisis relatively well and had not required Government bailouts as in the UK.

France has been vocal about the subject of bonuses and French President, Nicolas Sarkozy, has argued that excessive bankers’ bonuses reward the risk-taking that led to the financial crisis.

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