Brussels, 08/04/2013 (Agence Europe) - Could the scandal provoked by the revelations of the “Offshore Leaks” investigation (see EUROPE 10821) be the catalyst for a virtuous circle towards the automatic exchange of information, or at least for greater collaboration between the tax administrations of the countries of the EU and with third countries in order to fight against tax evasion?
This is what Luxembourg's finance minister, Luc Frieden, told the German newspaper Frankfurter Allgemeine Sonntagszeitung on Sunday 7 April: “The international trend is moving towards the automatic exchange of banking information. We are no longer strictly opposed to this. We want strengthened cooperation with foreign tax authorities.” Even if Frieden's statement does not specify the modalities of such cooperation, or the timeframes, if it is followed by tangible action, it could mark a change in Luxembourg's position. Together with Austria, Luxembourg has blocked the directive on savings tax since 2008 and has until now managed to maintain its banking secrecy by derogating from the system of automatic information exchange on the assets deposited in its banks by the nationals of other member states. Frieden thus seems to be taking notice of the international demand for increased transparency that is even making inroads in Switzerland, where the authorities and banks are trying to preserve banking secrecy by offering pledges to the countries with which Switzerland has concluded Rubik-type agreements and to the American administration in order to comply with FATCA legislation (see EUROPE 10821). FATCA legislation is also imposed on Luxembourg's banks and, as Frieden has already admitted, his country will not be able to go on refusing its European partners (because of European legislation) what it concedes to the Americans. Frieden seems to be yielding to the pressure of his German and French counterparts. In the face of the “Offshore Leaks” and “Cahuzac” affairs (Cahuzac being the former French budgets minister who has admitted having accounts in Switzerland and Singapore), the German and French finance ministers called on Friday for banking secrecy to be removed, with the French minister, Pierre Moscovici, going as far as calling for implementation of a European FATCA.
After what seems to be a U-turn from Luxembourg on this file, it is now Austria that - according to European Commissioner for Taxation Algirdas Semeta - is “in the hot seat”. Austria nevertheless is continuing to invoke the “protection of privacy” in order to maintain its banking secrecy and to refuse the automatic exchange of information, preferring taxation at source and bilateral agreements with third countries (as with Switzerland and Liechtenstein). In a press conference, Semeta's spokesperson, Emer Traynor, said it was “unacceptable that one member state could block 26 others” and that it was “difficult for Austria to maintain its position when all the other member states are ready to progress towards the automatic exchange of information”. More generally, Traynor said they wanted progress at the European Council on the anti-evasion package that was presented by the European Commission in December. With regard to a European FATCA, Traynor said they wanted closer collaboration with the United States for stricter global standards.
Traynor also hailed the work of the OECD, which has just issued new rules on this that oblige member states to: - exchange tax information with all countries that request it; - provide information on trust beneficiaries; - keep stock of offshore companies; - regularly take note of this information. (FG/transl.fl)