Friday

24th Mar 2017

Switzerland to defy EU tax transparency

  • An estimated €1 trillion is lost each year to tax evasion (Photo: Burning Robot Factory)

Switzerland should reject EU plans for mandatory information exchange on bank accounts, the country's President has said.

His statements comes amid new momentum in the EU to establish a system of automatic exchange of information among its member states and with other countries. In particular, it is anxious to agree a bilateral deal with Switzerland, one of the world's largest tax havens.

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Speaking over the weekend to the La Matin Dimanche journal, the Swiss head of state, Ueli Maurer, said that the EU's stance was "a dangerous moment for the country."

He added that the country's status outside the EU meant that it would not be bound by the savings directive.

"There is no reason to change our strategy now," he said.

Combating tax dodgers was one of the main topics discussed by finance ministers in Dublin at the weekend

EU taxation commissioner Algirdas Semeta said tax evasion is costing the European economy €1 trillion per year, roughly twice the amount of the combined bailout packages for Greece, Ireland, Portugal, Spain and Cyprus.

Speaking after EU finance ministers concluded talks in Dublin on Saturday (13 April), Semeta said that tighter rules were needed to ensure a "fairer environment for citizens, many of whom are currently carrying a heavy tax burden due to the crisis."

He also expected "quick agreement" on the savings tax directive.

The question of the UK's tax havens in the Caribbean and Channel Islands was also raised by German Chancellor Angela Merkel during her weekend talks with David Cameron.

Meanwhile, member states are also on the brink of agreeing new legislation making automatic exchange of data on bank depositors mandatory for all EU countries.

Austria is now the only country not to have signed up to the bloc's draft savings directive after Luxembourg dropped its opposition to the new rules, which would widen the disclosure requirements for off-shore bank accounts held by EU nationals.

But with taxation policy one of the few remaining policy areas where governments have the right to veto, all 27 countries are needed to agree the legislation.

With European countries desperate to increase their tax receipts and widespread public anger at stories indicating that many of the bloc's super-rich have found ways to avoid paying tax, the issue is politically charged.

European Council President Herman van Rompuy announced last week that reducing tax evasion would be the main theme at the EU's next summit gathering in May.

In a video message on Friday Van Rompuy underlined the scale of tax dodging in Europe which was, he said, equivalent to Spain's annual GDP.

"It is about the same as the Union's budget for the full seven years ahead. And it is one hundred times more than the loan that was recently agreed for Cyprus," he added.

French leader promises anti-tax-cheat crusade

French leader Hollande has promised to "eradicate" tax havens in the EU and in the wider world, after his approval rating fell to 26 percent following a tax scandal.

Top five EU states push for tax transparency

France, Germany, Italy, Spain and the UK have agreed new measures to fight tax fraud, putting pressure on Austria and Luxembourg to stop blocking an EU-level law.

EU seeks quick deal on tax transparency

The EU is hoping to reach agreement on automatic exchange of data on overseas bank accounts, according to a letter sent to national capitals on Wednesday

Analysis

Why is Austria so keen on bank secrecy?

Privacy concerns and the fear of losing big money from abroad are the main reasons why Austria is still holding out against an EU scheme to lift bank secrecy in Europe.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

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