France tweaks tax, labour rules to lure London bankers
French authorities yesterday stepped up efforts to attract London banks to Paris after Brexit by pledging to cut labour costs and promising no tougher regulations than in European rivals.
Many international banks in London are trying to decide where to shift operations to maintain access to the European Union's single market after Britain leaves the EU.
There is fierce competition between Dublin, Paris, Frankfurt and other European cities to woo the banks based in the City of London financial centre and some have already announced plans to move staff.
Until now, Paris' rivals, including Frankfurt, Dublin and Luxembourg, have been making the headlines as the locations banks, insurers and asset managers have chosen to open new hubs.
French prime minister Edouard Philippe said the government would scrap the highest bracket of payroll tax for firms like banks that do not pay VAT, cancel a planned extension of tax on share trading. It would also make sure that bankers' bonuses are no longer taken into account in unfair dismissal compensation.
"Promoting the financial attractiveness of Paris, is promoting France's economic attractiveness," MrPhilippe said.
"Every banker, every trader ... who settles in Paris triggers the creation of other jobs."
The payroll tax France charges banks and some other sectors such as property and healthcare is not levied in most other European countries.
Tax was a big concern for London bankers at a roadshow organised by a French finance industry lobby in February this year to promote Paris as a financial centre.
Germany is also looking at making it easier to hire and fire senior bankers in a relaxation of its labour laws to help to attract financial firms to Frankfurt.
Mr Philippe also pledged to review and change on a case-by-case basis some EU financial regulations transposed into French law.
"The French law has sometimes opted for overregulation when the European standards for the financial sectors were transposed," a document published by Mr Philippe's office said. (Reuters)