Germany mulls over tax cuts for foreigners

4th March 2005, Comments 0 comments

4 March 2005, BERLIN - Germany is considering introducing a special low income-tax scale for top-flight executives from abroad after a state premier said star managers were loathe to take jobs in Frankfurt and other cities. Finance ministers from the 16 states unanimously decided on Wednesday in Berlin to study the idea. Observers had earlier forecast the idea would be squashed from the start, since many Germans would feel aggrieved at being made to pay higher taxes than an imported boss. Chancellor Gerhar

4 March 2005

BERLIN - Germany is considering introducing a special low income-tax scale for top-flight executives from abroad after a state premier said star managers were loathe to take jobs in Frankfurt and other cities.

Finance ministers from the 16 states unanimously decided on Wednesday in Berlin to study the idea. Observers had earlier forecast the idea would be squashed from the start, since many Germans would feel aggrieved at being made to pay higher taxes than an imported boss.

Chancellor Gerhard Schroeder's Social Democrats castigated the idea on Thursday and the federal finance minister, Hans Eichel, said he was not about to offer "tax handouts to the super-rich".

As proposed by Hesse state's premier, Roland Koch, foreign executives would pay a flat rate of 30 percent income tax for up to three years, whereas Germans would pay a progressive rate topping out at 42 percent.

Koch argues this would make the financial capital of Frankfurt, which is in Hesse, more attractive while foregoing minimal revenue.

Gernot Mittler, finance minister of Rhineland Pfalz state, defended the idea, saying it was practised in France and other nations.

Almost all of Germany's top 100 companies are headed by German chief executives. The best-known non-German CEO in Germany is Josef Ackermann of Deutsche Bank, who is Swiss.

Traditionally, top German executives earn lower salaries than their US counterparts, and boards act collectively with a chief merely entitled the "spokesman", but in recent years pay rates have soared and prima donna corporate chiefs have become more common. 

DPA

Subject: German news

0 Comments To This Article