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29th Mar 2024

Berlin seeks EU move against tax havens

The German finance ministry is set to present a list of measures aimed at forcing tax havens such as Liechtenstein, Andorra and Monaco to cooperate with the EU's tax authorities at a meeting of Europe's finance chiefs starting today (3 March).

The move comes in response to a massive tax fraud involving Liechtenstein and some 1400 individuals, including 600 German citizens who had set up funds in the tiny principality in order to avoid taxes in their home countries.

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  • Berlin is seeking to prevent further tax fraud (Photo: European Commission)

The Berlin-proposed package seeks to force banks and financial institutions in tax havens to disclose information about their clients based in EU member states, particularly through beefed-up rules on savings tax, the Financial Times reports.

Since 2005, the 27-strong bloc has been implementing a Savings Tax Directive, which provides for an exchange of information among tax authorities in this area. The German draft proposal suggests extending its scope to other types of payments, legal entities and countries, such as Liechtenstein.

Last week, the principality's prime minister, Otmar Hasler, pledged to seek a "reasonable agreement" with Europe on tax and transparency issues, particularly after pressure from Germany and Berlin's threat that it could bloc Liechtenstein's move to join the EU's Schengen border-free zone.

While the move against tax havens is due to feature at the full ministerial session on Tuesday, finance chiefs from the 15 eurozone countries will meet on Monday for a regular get-together mainly to debate the current economic trends in the common currency area.

Apart from gloomy forecasts of rising inflation and slowing economic growth, ministers are expected to discuss the record strength of the euro against the US dollar, which is causing discontent among European exporters.

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