21 March 2014

EUobserver: 'Bank secrecy set to die' after Austria and Luxembourg back EU law

At the European Council, Austria and Luxembourg - the two countries which had delayed endorsing EU reforms on the Savings Tax Directive over the past six years of negotiations - agreed to back EU plans to increase transparency in tax reporting.

"We confirmed today that this is the course we want to follow," Luxembourg Prime Minister Xavier Bettel said. The political agreement means the updated Directive is set to be adopted on 24 March, before it is transposed into national law over the next two years. Bettel noted Europe is now committed to the new single global standard for automatic exchange of tax information.

EU Council chief Herman Van Rompuy in a statement said the agreement “is indispensable for enabling the Member States to better clamp down on tax fraud and tax evasion". "All Member States are firmly on board … Banking secrecy is set to die", he said.

Additional pressure to back the EU law was piled on the two countries after G20 finance ministers in February called for a global standard in 2015. The US Fair and Accurate Credit Transactions Act (Facta), a unilateral decision that makes banks operating in the US provide information on savings, also played a role.

26 Member States currently apply the old version of the EU law on automatic exchange of information. Austria and Luxembourg do not, after being granted a transitional period, in which they applied a withholding tax on interest payments made on savings. Both countries had also refused to sign up unless non-EU banking countries like Switzerland and Liechtenstein agree to apply the standard.

Full article

See also: State aid: Commission orders Luxembourg to deliver information on tax practices, 24.3.14

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