Brussels, 30/05/2000 (Agence Europe) - As briefly indicated in yesterday's EUROPE, the hope of coming to a compromise in the near future on savings tax flew out the window again on Monday. The Portuguese Presidency, which had drafted a compromise presented to the "high level group on taxation", was requested to review its copy, pointed out a Council representative. With footnotes and brackets, the text to be presented to the EU finance ministers on 5 June will therefore reflect the diversity of opinions expressed by the Fifteen rather than a common position.
The aim of the negotiations is to prevent EU nationals from evading taxation on savings income. Two weeks ago, the more constructive note of a debate that had remained sterile for some time had brought a clearer horizon. "But we had the wrong impression that the time was already ripe for compromise", said one diplomat. Monday's meeting, however, provided the opportunity for certain delegations to make their position firmer. The Presidency is proposing a system or information exchange on savings income of non-residents to be "as extended as possible". Member States, which, because of their legislation, cannot currently exchange information for tax purposes, would initially ensure savings are taxed by applying the withholding tax. For the United Kingdom, this solution does not go far enough. It calls for a buffer date to be fixed, from which information exchange would be generalised. In the meantime, it refuses to transmit information to the States which practice the banking secret and calls for one share of the income withdrawn from withholding tax to be recovered where it is practised. Four states oppose this (three states with banking secret - Luxembourg, Austria, Greece - plus Belgium), to preserve, in time, the possibility of raising withholding tax and against the setting in place of a redistribution system for tax receipts.
After the meeting on Monday, criticism was voiced on the way the Portuguese Presidency managed the issue during this term of office. "It put a text on the table but did not confirm its project by seeking, beforehand, to know what everyone's reactions were", commented one diplomat. "We have lost considerable time", on an issue that the French Presidency will finally inherit.