Dublin, 15/04/2013 (Agence Europe) -The next few weeks are likely to be very busy, in order to arrange rapid progress in moves to clamp down on tax avoidance ahead of the 22 May 2013 European Summit on tax issues.
Meeting in Dublin on Saturday, several EU finance ministers called for the automatic exchange of information on bank accounts held by non-residents to become the rule among the different countries in the European Union, which only Austria now resists.
Belgium, the Netherlands and Romania have now officially joined the other five (Germany, France, Spain, Italy, the United Kingdom) which were joined by Poland on Friday, calling for a joint tax information exchange information for non-residents based on the FATCA rules introduced by the United States (see EUROPE 10824).
French economy minister Pierre Moscovici said he wanted to send a message rather than put pressure on Austria as such, and said on Friday that he wanted to take advantage of the new push for clamping down on tax evasion to call for the introduction of a European FATCA. His German counterpart, Wolfgang Schäuble, said that the exchange of information should go further than current rules and apply to all types of income. A document submitted by the German delegation says that income from dividends, capital gains and royalties should be included. “With the agreements that have been signed by some countries, like FATCA, we have a new international standard emerging”, said U.K. Treasury chief George Osborne.
EU Tax Commissioner Algirdas Semeta made no secret of his surprise at being in Dublin on Saturday. Tax evasion was added to the Ecofin agenda at the last minute after recent revelation of tax evasion by famous people worldwide caused Luxembourg to announce that it will now be joining the EU exchange of bank information about non-residents in 2015, in order to introduce similar rights for EU countries as for the United States.
The Commissioner said that all options were on the table and comments would be turned into formal decisions as soon as possible and certainly before the May Ecofin Council: “I expect today's discussions to be formalised and turned into decisions without delay. I expect agreement on the stronger Savings Directive within weeks, along with a mandate to start negotiating with Switzerland and the other neighbours. I expect the new EU administrative cooperation rules to be applied fully and swiftly”. People in the commissioner's circle say they won't believe the politicians' talk until it is put into practice, and it would be problematic if a negotiating mandate is not given in May.
Austria stands firm. Using its right to veto tax decisions, Austria officially rejects any audit of its tax rules. Austrian Finance Minister Maria Fekter says Austria will continue to hold firm on banking secrecy. She criticises the automatic exchange of information as an intrusion on privacy and says that big countries like the UK were a pot calling the kettle black. Semeta said, however, that he had detected some openness in Austria's attitude during the finance minsters' debate and Austria had not said anything to hamper progress in this field, which is itself progress, he said. Luxembourg is reported to have reservations about the EU negotiating mandates for tax havens and the commissioner said there was a window of opportunity here, but refused to give any details.
The doubts of Austria and Luxembourg are fuelled at the moment by Switzerland's refusal to give ground and make Swiss bank accounts public by joining the automatic exchange of information system recommended by the EU. Switzerland's finance minister said at the weekend that alternative solutions were available like Rubik-type one-off tax deals and the “clean money strategy” adopted by the country in December 2012 to only accept cash that has been declared to the tax authorities and to encourage the holders of existing bank accounts to pay tax on their cash, in return for its being kept secret. The lifting of secrecy for US passport-holders upon signature of the FATCA deal has opened a breach and the Swiss government may now be forced to make similar concessions to the EU, particularly if Luxembourg and Austria are pressurised by their peers into granting the Commission a negotiating mandate to this effect. (MB/transl.fl)