Strasbourg, 18/03/2002 (Agence Europe) - The European Parliament supports the line taken by the Commission and the Council compromise on savings tax and adopted the report by Spanish Socialist Fernando Perez Royo in the framework of the consultation procedure. During the debate, MEPs focussed on the importance and problems of the negotiations that are underway with third countries to get them to adopt "equivalent measures" to those implemented in the EU.
The rapporteur pointed out that as part of the compromise agreed at the Feira Summit, Member States pledged to adopt the tax package by the end of 2002 to counter tax evasion and damaging fiscal practices. Under pressure from the United Kingdom, the Member States replaced the scheme of deduction at source and exchange of information with a system composed uniquely of sharing information among tax authorities. Luxembourg, Belgium and the Netherlands were granted a seven year derogation before applying the information system since it amounts to lifting banking secrecy. During the transition period they will deduct 15% at source in the first three years and then 20% afterwards. In exchange, Luxembourg demanded that agreements be signed with other countries (the United States, Switzerland, Andorra, Liechtenstein, Monaco and San Marino, the British islands off France and Caribbean territories associated with the UK and the Netherlands) to ensure they apply equivalent measures before the package is adopted.
When it boils down to it, the problem is that Switzerland refuses to lift banking secrecy, explained Fernando Perez Royo, adding however that at the risk of seeming a naive optimist, he felt that everything in the world could be negotiated and Swiss banking secrecy was already not what it used to be. He said that the United States had already breached it by adopting a national regulation requiring Swiss banks to provide information about transactions between US citizens and deducting a 30% tax at source. In the context of the fight against terrorism, concerted action between the European Union and the United States could act as a level, he added.
The dossier is far from being settled, however. Regretting that Member States had rejected the system of deduction at source at the Feira Summit, the Luxembourg EPP MEP Astrid Lulling said that if Switzerland, for example, refused to exchange information because of its legitimate attachment to banking secrecy, there was no way her country would practise it. She said she was convinced that exchange of information would not be the solution that would be chosen in the end.
The broad agreement between Council and Parliament on the proposal can only strengthen the Community's hand in its negotiations with third countries, said Commissioner Frits Bolkestein, hoping the negotiations could be concluded by the end of the year. The Commissioner wrote to Switzerland at the beginning of March to request the launch of immediate investigations, but Switzerland has been calling for overall negotiations on all pending bilateral agreements (see EUROPE of 7 March, p.12). The Commissioner prudently rejected an EP amendment to include in the directive the question of negotiations with third countries which would ensure the directive, once adopted, was conditional on the outcome of the negotiations.