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Business Briefs

German tax amnesty extended, companies plan more redundancies and businesses favor moving to Austria.


German Finance Minister Hans Eichel is willing to give tax dodgers more time

Amnesty extended for tax dodgers

The German Finance Ministry will extend a planned tax amnesty on undeclared funds brought back by tax dodgers from abroad until March 31, 2005, the business daily Handelsblatt reported on Tuesday. The new timeframe, which begins on Wednesday, replaces the deadline which required the return of funds by the end of next year, the newspaper said. The report states that Germans repatriating savings from abroad will pay a tax of 25 percent without punishment, if they report to tax offices by December 31, 2004, ministry spokesman Jörg Mueller told reporters on Monday. Funds declared in the first quarter of 2005 will be taxed at 35 percent, according to Handelsblatt. The Bundesbank recently revealed that Germans have stashed away about €150 billion ($178 billion) in secret accounts in countries such as Luxembourg, Switzerland and Liechtenstein.

More job cuts planned

According to the latest survey by Manpower GmbH, German companies will continue to cut jobs in the third quarter of 2003. The worrying news, carried in a report in the daily newspaper Frankfurter Allgemeine Zeitung, stated that about 20 percent of the 1,041 companies surveyed plan to cut jobs, while only about 10 percent said they expect to increase staff. The paper said that most jobs will be lost in construction and the fewest will be shed in manufacturing. German companies are slashing jobs in an economy that has barely grown for two years. The seasonally adjusted jobless rate in May remained unchanged from April at 10.7 percent.

Businesses prefer a move south

German daily newspaper Die Welt carried a story on Tuesday that suggested more German companies are considering moving their operations to Austria, following such examples as Infineon Technologies AG which has hinted that it may shift its main facilities outside Germany to save costs. The paper reported that 600 German companies filed requests with the Austrian Business Agency to set foot in Austria in the first six months of 2003, compared with 310 last year. Die Welt said that approximately 5,300 German companies have branches in Austria. Last year they reportedly invested €18.8 billion ($22.4 billion) in the southern neighbor, and more than 1,000 companies, including Siemens AG and SAP AG, conducted their business for central and eastern Europe from Austria.

Longer workweek boosts economy

Germany’s ailing economy would get a healthy boost if the country’s workers would put in just one more hour of work a week without receiving additional pay, says the Institute for German Economy (IW) in Cologne. According to the study published on Tuesday, the gross domestic product for this year would increase by 1.6 percent, compared to the 0.5 percent some economic experts are predicting and the 0.75 percent the government is quoting, if everyone worked an hour longer per week. In the coming year, a lengthening of the workweek would lead to the creation of around 60,000 new jobs and a growth rate of 3 percent. The study comes in the midst of a two-week-long steelworkers strike for a shorter workweek in eastern Germany. The average workweek in Germany is 38 hours.

Compiled by DW staff from newswires and other sources.

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