German Government Plans To Cut Corporate Tax

The German government is planning a sharp reduction in taxes for companies, Finance Minister Peer Steinbrueck said May 4, as newspaper reports suggested the cuts could come into effect as early as next year. "We want to cut taxes because we know our tax rates have to compete on an international level," Steinbrueck told German ARD public television in an interview. But the minister declined to disclose any details prior to the summer break, refusing to comment on reports the corporate tax rate could fall below 30%.

A number of newspapers, including the dailies Sueddeutsche Zeitung and Financial Times Deutschland, had said that the corporate tax rate could be cut to less than 30% percent from 39% at present.

The grand left-right coalition under Chancellor Angela Merkel is hoping to draw up a reform of company taxes by 2008. Newspapers said Steinbrueck had proposed bringing forward the reform to 2007, but his proposals have been blocked by the conservatives.

And it remains unclear how the cuts would be financed.

Copyright Agence France-Presse, 2006

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