Bank secrecy is almost over in the EU
The days when people could stash their money into overseas bank accounts in order to avoid paying taxes, a very common occurrence in Malta, are almost over as the EU is tightening its belt around jurisdictions which are still providing this...
The days when people could stash their money into overseas bank accounts in order to avoid paying taxes, a very common occurrence in Malta, are almost over as the EU is tightening its belt around jurisdictions which are still providing this service.
Although Luxembourg and Austria are still resisting more controls from the EU's end, European Taxation Commissioner Laszlo Kovacs has warned that bank secrecy will soon be over.
The two states, along with Belgium, currently operate a temporary opt-out scheme from EU rules in the area, particularly the Savings Tax Directive, that require the automatic sharing of data. The three countries instead apply special withholding tax on the savings accounts of non-residents. Belgium has already agreed to lift its "secrecy" provisions as from the beginning of next year.
However, according to Mr Kovacs, even for Austria and Luxembourg, bank secrecy will soon be over.
"The deadline is the day when the five other European countries which are not members of the European Union - namely Switzerland, Liechtenstein, San Marino, Monaco and Andorra - agree on the exchange of information on request," he said yesterday when announcing a new EU plan to make taxation more transparent.
Mr Kovacs said that this deadline is outlined in the Savings Taxation Directive and it appears to be approaching rapidly as next month he will be asking a meeting of finance ministers in Brussels for a mandate to start talks with the five countries.
Launching a new plan in Brussels, Mr Kovacs said that the Commission is proposing actions to improve transparency and international cooperation in the tax area.
In the document, the Commission identifies how good governance could be improved within the EU through more transparency, exchange of information and fair tax competition. It also lists the tools the EU and its member states have at their disposal to ensure that good governance principles are applied at international level and calls on member states to adopt an approach that is more coherent with good governance principles in their bilateral relations with third countries and in international fora.
"EU member states cannot afford to act alone when designing policies to prevent their tax revenues disappearing to tax havens or non cooperative jurisdictions. If they do not cooperate with each other, including in international fora, their actions to protect their revenues will not produce effective results," Mr Kovacs said.
Once again the Commission is urging its member states to adopt as soon as possible its recent proposals to ensure effective administrative cooperation in the assessment of taxes which would, in particular, prohibit member states in future from invoking bank secrecy laws as a justification for not assisting the tax authorities of other member states, and to ensure administrative cooperation in the recovery of tax claims.
On the international level, the Commission is calling on member states to adopt a coordinated and coherent approach in the promotion of good governance principles towards third countries, including, where appropriate, coordinated action against jurisdictions that refuse to apply good governance principles.
Although Luxembourg and Austria are still resisting more controls from the EU's end, European Taxation Commissioner Laszlo Kovacs has warned that bank secrecy will soon be over.
The two states, along with Belgium, currently operate a temporary opt-out scheme from EU rules in the area, particularly the Savings Tax Directive, that require the automatic sharing of data. The three countries instead apply special withholding tax on the savings accounts of non-residents. Belgium has already agreed to lift its "secrecy" provisions as from the beginning of next year.
However, according to Mr Kovacs, even for Austria and Luxembourg, bank secrecy will soon be over.
"The deadline is the day when the five other European countries which are not members of the European Union - namely Switzerland, Liechtenstein, San Marino, Monaco and Andorra - agree on the exchange of information on request," he said yesterday when announcing a new EU plan to make taxation more transparent.
Mr Kovacs said that this deadline is outlined in the Savings Taxation Directive and it appears to be approaching rapidly as next month he will be asking a meeting of finance ministers in Brussels for a mandate to start talks with the five countries.
Launching a new plan in Brussels, Mr Kovacs said that the Commission is proposing actions to improve transparency and international cooperation in the tax area.
In the document, the Commission identifies how good governance could be improved within the EU through more transparency, exchange of information and fair tax competition. It also lists the tools the EU and its member states have at their disposal to ensure that good governance principles are applied at international level and calls on member states to adopt an approach that is more coherent with good governance principles in their bilateral relations with third countries and in international fora.
"EU member states cannot afford to act alone when designing policies to prevent their tax revenues disappearing to tax havens or non cooperative jurisdictions. If they do not cooperate with each other, including in international fora, their actions to protect their revenues will not produce effective results," Mr Kovacs said.
Once again the Commission is urging its member states to adopt as soon as possible its recent proposals to ensure effective administrative cooperation in the assessment of taxes which would, in particular, prohibit member states in future from invoking bank secrecy laws as a justification for not assisting the tax authorities of other member states, and to ensure administrative cooperation in the recovery of tax claims.
On the international level, the Commission is calling on member states to adopt a coordinated and coherent approach in the promotion of good governance principles towards third countries, including, where appropriate, coordinated action against jurisdictions that refuse to apply good governance principles.