Deutsche Bank May Leave Germany Over Rising Taxes

by Ulrika Lomas, Tax-News.com, Brussels

05 September 2003

German banking giant Deutsche Bank fuelled speculation this week that it may turn its back on Germany and move its central operation overseas due to an increasing tax burden that rose by 46% in the second quarter, according to a report in the Financial Times.

Speaking at a conference in Frankfurt recently, the bank's chief executive Josef Ackerman announced: "We must look for ways to reduce our tax burden. If that means moving more businesses to countries where taxes are lower, we are obliged to examine that."

Whilst the banking group's official headquarters are located in Frankfurt, two-thirds of its profits are generated abroad and five of its seven business operations are located in either the United States or the United Kingdom, reports the FT. Ackerman's words are likely to spark rumours that the bank is poised to switch its headquarters to either New York or London.

Officials at Deutsche have sought to play down Ackerman's remarks however, stressing that the bank has no plans to move its headquarters.

Meanwhile, Mr Ackerman also announced this week a 3.3 billion euro share buyback programme which it intends to complete by the end of September 2004. "The share buyback programme shows that we are ready to return excess capital directly to our shareholders," Ackerman said in a statement. The pronouncement comes close on the heels of a recent decision by the bank to raise at least 500 million euros in hybrid debt.

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