Tuesday

22nd Oct 2019

Tax commissioner lets rip against Austria and Luxembourg

  • Semeta on Tuesday: 'I leave it to them to explain [it] to citizens across Europe' (Photo: consilium.europa.eu)

"Completely unjustifiable ... grossly unfair ... a mystery" - the European Commission and the Danish EU presidency have given Austria and Luxembourg a tongue-lashing for protecting tax evaders.

The harsh words came after the two countries on Tuesday (15 May) blocked the commission from holding talks with Switzerland on a new savings tax law designed to recoup some of the estimated €1 trillion a year lost to EU exchequers in tax fraud and evasion.

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Tax commissioner Algirdas Semeta in a press conference in Brussels said: "The position that Austria and Luxembourg have taken on this issue is grossly unfair. They are hindering 25 willing member states from improving tax compliance and finding additional sources of income."

He added: "They claim that they are protecting their own national interests. This excuse does not stand up ... I leave it to them to explain to citizens across Europe why they can support tax hikes and spending cuts for ordinary people, but won't allow us to step up our fight against tax evaders."

Danish economic affairs minister Margrethe Vestager took his side.

"It is a mystery why we shouldn't move on making people pay the taxes that they should pay," she noted. She described Austria and Luxembourg's decision as "unfortunate."

For their part, Luxembourg and Austria have declined to publicly explain why they are against the move.

Semeta on Tuesday indicated they object to "automatic transfer" of tax data between EU countries and Switzerland, even though the alternative is trusting Switzerland to decide which data it gives and which it withholds.

He added that automatic exchange is becoming the international gold standard in the field, with "the US moving in the same direction."

In a previous interview with EUobserver, he said they are also concerned about the UK and Germany making bilateral deals with Switzerland which would make British and German banks more competitive. But the UK and Germany have changed the bilateral arrangements to fall in with Semeta's law.

In the same interview he noted it might be a deeper problem related to "the long history and traditions of banking secrecy" in Austria and Luxembourg.

He added on Tuesday that the EU cannot use its so-called "enhanced co-operation" mechanism - where a sub-group of nine or more EU countries move forward on a given dossier - because there must be a level playing field on tax in the Union.

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