Brussels, 15/02/2011 (Agence Europe) - At the 15 February sitting of the Economic and Finance Council, the EU27 adopted without debate a directive introducing OECD standards for the exchange of information among member states' tax offices about direct taxation with a view to fighting tax fraud. The ministers held a policy debate on the draft revision of the 2003 EU savings tax directive, an anti-fraud deal with Liechtenstein and the negotiating mandate for the European Commission for anti-fraud deals with Andorra, Monaco and San Marino and a new anti-tax fraud deal with Switzerland.
Commenting on savings tax and the anti-fraud deals, the chair of the meeting, György Motolcsy, and EU Commissioner Algirdas Semeta stressed the need for fast action because public opinion cannot understand why public spending is being cut and taxes increased but the change of legal taxation of savings is being passed by, as the Commissioner put it, calling for progress on amendments to the directive covering the end of the transition period (see EUROPE 10315). On the question of demanding that non-EU countries follow suit, he recommended reaching agreement at EU level before asking for equivalence from countries outside the EU. In response to a request from Italy in December 2010, he said that a questionnaire was being prepared to examine how the directive is functioning.
During the debate, Austria said that fair competition with countries like Switzerland and other tax havens was a vital precondition for agreement on the savings tax directive and that the deals being negotiated by Switzerland with Germany and the UK undermined competition. Luxembourg's finance minister, Luc Frieden, made similar noises, calling for effort to ensure savings do not flood out of the EU and to ensure the EU remains a competitive place to save. He said that ten years ago, when the first savings tax was being negotiated, most delegations did not want taxation at source, but many have introduced it for their own country and are now negotiating double taxation agreements. He said a fundamental debate about policy, the system and the mechanics of it is needed. Italy called for an assessment of implementation of the current directive (see above), followed by proposals to improve it before considering any amendments. Germany's finance ministers said that priority should go to agreeing on a realistic transition period for the automatic exchange of information. France said that when it comes to deals with tax havens, commitment to the negotiations should not be made conditional upon their achievement. Romania favours separate negotiations. (F.G./transl.fl)