Brussels, 23/06/2004 (Agence Europe) - The permanent representatives of the Member States (Coreper) have called upon the Commission to present a proposal to postpone the date for the entry into force of the directive on tax on savings from January to July 2005. In the meantime, the Council will adopt a decision on Monday, without discussion, stating that the "conditions" for the entry into force of the text in January 2005 have not been met, due to a lack of commitment on the part of Switzerland on the date for the tax on savings agreement to be applied.
An agreement was concluded for Berne to deduct withholding tax at source on income from savings accounts placed in Switzerland by EU residents. This "equivalent" measure to those in place in the EU is the essential condition demanded by Luxembourg in order to accept the directive on tax on savings.
However, the Swiss federal government confirmed this week that it cannot make the commitment on the text's entry into force, because although the Swiss parliament has agreed to it, it is still possible that 50,000 citizens will call for a referendum. This procedure will take at least 14 months. At best, the text could enter into force in July 2005 if there is no referendum on it, Swiss authorities stated on Tuesday.
The Commission has blocked the initialling of all bilateral agreements (taxation, plus Schengen, agriculture, media, etc) pending this commitment. Berne is not happy about this, stating that until the agreements have been initialled, the ratification procedure cannot be started, which will delay the entry into force of the texts.
The Banking Federation of the European Union (FBE) has also pleaded for the entry into force of the European directive to be delayed. In a press release published at the start of the month, it stated that European banks would be hit by unfair competition if they had to apply the planned measures before their Swiss counterparts. Furthermore, the FBE underlines that the Member States and European institutions have not yet given detailed instructions allowing the tax administrations and banks to prepare for the application of the directive. "The banks have never informed the Commission that they would not be ready" and "the Commission does not take these affirmations seriously", commented Jonathan Todd, spokesperson to Commissioner Frits Bolkestein, on Wednesday.