Berlin split over tax on interest payments

Germany's coalition government appeared split on 20 July 2006 when Michael Glos, Economics Minister, said he did not approve of his government's plan to tax interest payments as part of corporate tax reforms. The provision, in a reform blueprint adopted by Chancellor Angela Merkel's cabinet earlier in July 2006, sparked an outcry from business, which has warned that the measure could close a key financing avenue for German companies and trigger capital flight.