Brussels, 10/12/2013 (Agence Europe) - As predicted, EU finance ministers at the Ecofin Council on Tuesday 10 December were unable to reach agreement in principle on the draft revision of the savings tax directive, due to opposition from Luxembourg and Austria. At the request of France, joined by the United Kingdom, Italy and the European Commission, the question will now most likely be put to the heads of state at the European summit on 19 and 20 December.
Explaining his country's position, Luxembourg's finance minister said that insufficient progress has been made in the talks between the EU and five countries, Switzerland, Liechtenstein, Monaco, Andorra and San Marino on changes to be made to their tax agreements to incorporate the main aspects of the changed EU savings tax directive to extend the scope of application to all savings income held by EU residents in the said countries, and automatic exchange of bank information and information about the beneficiaries of income on savings. The minister said that heads of state had asked in May for the directive to be adopted in the light of the negotiations with the five countries and, while some positive progress has been made, Commissioner Semeta's report says that the negotiations are still ongoing. In order to adopt the directive, Luxembourg requires: - identical conditions to apply in the five countries to those introduced in the EU by the savings tax directive (it is particularly concerned about Switzerland), in order to prevent capital being shifted to the five countries; - for EU legislation to be coherent with the future global automatic exchange of information (AEI) rules being developed by the OECD on request from the G20, which is expected by June 2014 (Luxembourg wants the savings tax directive to be aligned with the OECD rules before adopting it, in order to ensure legal security and reduce the cost of compliance). The minister explained that progress has been made in his country to bring its rules into line with EU and international standards (commitment to apply AEI in 2015, commitment to introduce the global AEI rules drawn up by the OECD and ratification over the next few months of the OECD convention on mutual cooperation on tax matters). Austria's new government has not yet been formed and no Austrian ministers attended the Ecofin Council, but it is demanding prior agreement with the five countries as a precondition for signing up to the revised savings tax directive, along with the formation of a central registry of non-cooperative jurisdictions as part of the armoury of weapons to tackle money-laundering.
All the other delegations, joined by the European Commission, urged the two countries to change their minds. French Finance Minister Pierre Moscovici said that their opposition was “incomprehensible” when serious progress has been made internationally on the spread of AEI and on a stronger stance against tax fraud. Pointing out that not reaching agreement by the end of the year would run against the instructions of the European summit in May, he urged heads of state to tackle the question at the summit on 19 and 20 December, a request backed by Italy's Finance Minister, Fabrizio Saccomani, who said that the fact that the talks with the five countries are still ongoing was simply an “excuse”, and it was a shame that Europe was dragging its feet on an issue on which it is the world leader and the only people to benefit from the situation were fraudsters. Summing, up, the Presidency was forced to note that the negotiations had not been successful. (FG/transl.fl)