France to ease finance, tax rules to attract Brexit bankers
PARIS – France will pare back financial regulations to EU minimums and introduce new tax incentives to make Paris a more attractive finance hub, Prime Minister Edouard Philippe said on Wednesday.
Speaking to a reception for 200 finance executives, Philippe said most of the changes would be made by the end of the year, as countries across the EU battle to attract bankers from London amid uncertainty over the impact of Brexit on the region’s biggest financial center.
For asset managers coming to France, they will be able to have capital income known as carried interest taxed at 30 percent rather than higher income tax rates.
The country will also make it possible to amortize goodwill, as in Germany, as part of a longer term European project to harmonize regulations for calculating corporate tax.
“A financial center is built with patience, by being consistent. I want this consistency to be the trademark of our economic strategy and our attractiveness policy,” Philippe said in a speech.
The moves add to steps already taken by President Emmanuel Macron aimed at boosting Paris as a financial center, such as plans to gradually cut corporate tax to 25 percent and scrapping a wealth tax on financial assets.
Macron’s government has also set a flat tax of 30 percent on all capital income and removed the top marginal band of payroll tax, although the moves have led to criticism of Macron as being a president for the rich.
Paris is competing with the likes of Frankfurt, Dublin and Luxembourg to win over finance jobs in the wake of Britain’s departure from the EU next March.
The Paris Europlace financial sector lobby said on Wednesday Paris was set to win 3,500 financial sector jobs leaving Britain due to Brexit.
HSBC <HSBA.L> would make up the bulk, with 1,000 jobs, while French banks moving posts back to their base in Paris would add another 1,000 jobs, and the rest would come from a host of Wall Street banks and other financial firms.
Bank of America Merrill Lynch <BAC.N>, JPMorgan <JPM.N>, Citigroup <C.N>, Morgan Stanley <MS.N>, Goldman Sachs <GS.N>, Standard Chartered <STAN.L> and Wells Fargo <WFC.N> have all made “announcements in favor of Paris”, Paris Europlace said.
(Reporting by Jean-Baptiste Vey; Additional reporting and writing by Leigh Thomas; Editing by Michel Rose and Mark Potter)
Published on Wed, 11 Jul 2018 12:33:21 -0700