Germany's SPD Party Agrees On Stock Market Sales Tax

by Ulrika Lomas, Tax-News.com, Brussels

17 February 2009

Marking a dramatic about-face, Germany’s Social Democratic Party (SPD) has finally united on plans to embed the re-introduction of a sales tax on stocks and shares in its election campaign.

Unlike the flat rate tax, introduced at the beginning of the year, which targets profits realised on the stock market, the proposed sales tax will affect the whole of the sum invested, since any transaction – whether buying or selling stocks and shares – will be liable to a tax on a certain percentage of the sum, generating billions for the state.

Germany’s Finance Minister and SPD vice-chairman Peer Steinbrück has revealed his intention to base the tax – thought to be between 0.1% and 1% – on the model currently used in the UK.

Since the abolition of the original sales tax in 1991, under the then Chancellor Helmut Kohl’s government, the SPD has – rather ironically – vehemently opposed its re-introduction, including Steinbrück.

Given the profound effects of the prevailing global economic crisis, however, the SPD now views the tax as a means to curb reckless financial speculation, and, consequently, to provide a much-needed impetus to its election campaign.

SPD party member Joachim Poss is also eager to include the sales tax in the agenda of the G20 summit meeting, to be held in London at the beginning of April.

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