For Wolfgang Schäuble, Germany’s finance minister, the European bank tax is actually a welcome undertaking. After all, there is widespread public appeal in the notion that European banks would make financial provisions for future shortfalls. And the primary goal of the planned €55 billion ($71 billion) restructuring fund is to protect taxpayers.
But Mr. Schäuble anticipates the project could cause a problem that might lead to some unpleasant debates. The sticking point is Germany’s own national bank tax, which has been in effect since 2011, and is not tax deductible. The reason: If it were deductible, German taxpayers would be indirectly paying the tax too.
Mr. Schäuble wanted this rule to apply throughout Europe as well. The only problem is that he is more or less isolated on this position. The parliamentary finance spokesman for Germany’s Left Party, Axel Troost, asked the finance ministry to specify which countries have rules similar to Germany’s.
Handelsblatt has been shown a copy of the ministry’s reply: “Without laying claim to completeness, I can inform you that apart from Germany, Cyprus is the only other country where it is impossible to deduct the bank tax,” wrote Steffen Kampeter, a senior ministery official.
“According to available information, the tax can be deducted in seven countries (Belgium, France, Spain, Ireland, Poland, Portugal and Sweden),” he continued.
So there is little hope in the finance ministry that bank tax deductions can be excluded throughout the European Union. There are two remaining possibilities: Either Mr. Schäuble holds fast to the German regulation, which would put domestic banks at a competitive disadvantage. Or German banks should be allowed to deduct the tax in the future, which would be expensive.
If the German bank tax had been deductible up to now, that would have meant a “purely mathematical” revenue reduction of €160 million, or about $207 million, for the German treasury in 2013, according to Mr. Kampeter’s document. For 2012, it would have cost €210 million.
This article was translated by George Frederick Takis. Greg Ring also contributed. To contact the author: email@example.com