Page last updated at 17:14 GMT, Wednesday, 16 December 2009

France to bring in bank bonus tax

French Finance Minister, Christine Lagarde
French Finance Minister Christine Lagarde says the tax is 'fully justified'

French Finance Minister Christine Lagarde says France is to introduce a tax on bankers' bonuses similar to the one introduced in the UK.

Any bonus above 27,000 euros ($39,000; £24,000) will be taxed at a rate of 50% on payments given out in 2010.

Ms Lagarde told reporters that a bill would be brought before the French parliament in January.

Last week, UK Chancellor Alistair Darling announced a similar measure in his pre-Budget report.

French officials had said last week that a bonus tax was on the cards, but no details were given.

"This is a proposal that the President made in August and that we fought for on an international level" said Ms Lagarde.

The French Banking Federation said it regretted the decision and that it would "further damage Paris' competitiveness".

It said the French banking system had withstood the financial crisis relatively well and had not needed government bail-outs as in the UK.

German Chancellor Angela Merkel has said she is sympathetic to the idea but that it might be against German law.

Taxes on bonuses are being brought in to quell public anger about the high level of bankers' pay when many of the banks have received government support.

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