French Finance Minister Considers New Tax On Banks

by Ulrika Lomas, Tax-News.com, Brussels

21 October 2009

French Finance Minister Christine Lagarde has announced her intention to create a new tax, specific to the banking sector, which will enable the country’s banks to assume costs associated with their regulation.

Although vehemently opposed to the idea of increasing the existing rate of tax levied on banking profits, Finance Minister Lagarde has, nevertheless, expressed her belief that it is entirely “logical” that French banks assume the costs associated with the increased supervision of their sector.

Determined to increase the attractiveness of France as a financial center, Lagarde has firmly ruled out the idea of a national initiative which would increase the burden on the country's banking sector, and further reduce the competitiveness of French banks, given that corporate taxation in France is already very high.

Recently adopted by the National Assembly Finance Committee, an amendment put forward by the President of the Committee, Didier Migaud, aims to increase by 10% the tax currently levied on banking profits.

Adopted by 20 votes to 11, the amendment is limited purely to 2010, applying to 2009 profits, and will be put to the vote shortly in the French National Assembly.

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