Feira, 19/06/2000 (Agence Europe) - After several fruitless attempts, the European Union's Finance Ministers were trying again, on Monday evening, to break the deadlock on taxation, on the fringe of the Feira Summit. "We are going to break all records for the number of Ecofin meetings over a two-day period", commented Belgian Finance Minister Didier Reynders, as the fourth Council session was getting under way. He announced that 13 States were in agreement but that Austria and Luxembourg still had reservations.
The Fifteen are trying to work out a solution to the problem of the taxation of earnings on savings of EU citizens when they place their money in a State other than their State of residence. After having worked at length on the "model of coexistence" which would make it possible to opt in favour of exchange of information between tax administrations or (when they practise banking secret) for withholding of 20%, the Member States generally admit that information exchange must be the "final aim" of the European Union. "The debate is on knowing how to achieve this", declared German Finance Minister Hans Eichel.
The United Kingdom calls for a buffer date to be set from the outset for moving to an exclusive system of information exchange, whereas Austria and Luxembourg hope to discuss the matter again after several years of joint existence. The conciliation scenario imagined by the Portuguese Presidency would amount to making the date for transition to the single system of information exchange eight years from now. In order to avoid capital leaks towards Switzerland, Liechtenstein, Monaco, Andorra, San Marin and the United States, the Commission would begin talks with these places to obtain guarantees and, if possible, the adoption of "equivalent measures". The United Kingdom and the Netherlands should, for their part, ensure implementation of "similar measures" in their dependent territories or associate territories (Channel Islands, Isle of Man and Caribbean territories). After two years, the Fifteen could unanimously decide to implement the directive. After entry into force, the Member States interested (Austria, Belgium, Luxembourg, Greece) would still have a transitional 5-year period during which they could apply withholding of at least 20% on savings income from non-residents. "There are difficulties concerning the rate of taxation for withholding and the method of transition to a single information exchange system", explained Mr Reynders. Luxembourg is opposed to the rate of 20%. The solution could be … not to mention figures at this point. On the second point, there are difficulties in Luxembourg and Austria.