German FinMin Opposes Competitive Tax Cuts After Brexit

German Finance Minister Wolfgang Schaeuble has said he opposes a “race to the bottom” of competitive tax cuts.

He spoke after George Osborne pledged to cut UK corporation tax in response to the Brexit vote.

At the same time, in an attempt to attract UK businesses, the French government promised its taxes will be the most favourable in Europe.
“We want to build the financial capital of the future,” French Prime Minister Manuel Valls said on Wednesday.

“In a word, now is the time to come to France.” Mr Valls said.
But Mr Schaeuble said: “We have no intention to start some sort of race to the bottom”, in response to Mr Osborne’s proposal to slash corporation tax to below 15% to avoid a business exodus after the 23 June vote.

France’s financial sector has often complained of government indifference towards the industry, which is subject to high taxes and sometimes hostile remarks from politicians.

But last month’s Brexit vote is viewed as a opportunity by the French government.

The implications of the UK leaving the EU could place a huge question mark over London’s place as the centre of Europe’s banking business.

“We are bringing solutions today to companies that are asking questions and expecting answers to prepare for the future,” Mr Valls said.

He said France’s already favourable tax regime for expatriates and French nationals returning from stints abroad would in future be applicable for their first eight years in France, up from five currently.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza