Friday

6th Dec 2019

Austria, Luxembourg to play ball in tax clampdown

  • Some €1 trillion are lost yearly to tax evasion (Photo: bundesbank.de)

Germany expects Austria and Luxembourg to take part in an EU-wide effort to clamp down on tax evasion, even though the two countries last week blocked a key EU proposal on the topic.

An EU summit devoted to tax evasion on Wednesday (22 May) is not meant to "pressure" Austria and Luxembourg, but the German government expects the two countries to eventually back an initiative they blocked last week, a senior German official said Tuesday in Berlin.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 30-day free trial.

... or join as a group

The official underlined the significance of the Austrian and Luxembourg finance ministers last week agreeing to give a mandate to the European Commission for savings tax deals with Switzerland, Andorra, Liechtenstein, Monaco and San Marino.

"If they agreed to automatic data exchanges between the EU and these five countries, it also implies they will participate in the automatic data exchange within the EU. Or else it would make no sense. So we see a pretty clear link here," the source said.

Meanwhile, in Brussels, EU officials also expressed their hope that the Wednesday summit will bring about "some movement" from the Austrian and Luxembourg delegations.

The mandate agreed last week was a "significant breakthrough", but EU states still need to "step up efforts in agreeing the EU savings tax directive," Irish foreign minister Eamon Gilmore said Tuesday in a press conference after chairing a preparatory meeting ahead of the summit.

EU administrative affairs commissioner Maros Sefcovic also said it was "very good" that ministers agreed on the mandate, "but the real test is whether we can deliver quick progress on the savings directive" blocked by Austria and Luxembourg.

With general elections due end of September, the two largest Austrian parties that form the ruling coalition - the Social-Democrats of Prime Minister Werner Faymann and the Conservatives of finance minister Maria Fekter - are at odds on whether to support the scheme or not.

Luxembourg, meanwhile, has said it will participate in the automatic exchange from 2015 on, although last week it backed the Austrian stance.

On Tuesday, Luxembourg repeated its position to the US, promising it will share information about bank accounts held by US citizens and residents from 2015 on.

"Luxembourg wishes to see the same conditions apply to all competing financial centres and to see the automatic exchange of information accepted as the international standard," a statement of the Luxembourg finance ministry said.

A large trove of offshore accounts leaked to several international newspapers has stepped up pressure on governments to clamp down on tax havens and go after unpaid taxes. Estimates put the lost tax revenues at €1 trillion yearly.

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.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Latest News

  1. Migrants paying to get detained in Libyan centres
  2. Searching for solidarity in EU asylum policy
  3. Will Michel lead on lobbying transparency at Council?
  4. Blood from stone: What did British PR firm do for Malta?
  5. EU Commission defends Eurobarometer methodology
  6. Timmermans warns on cost of inaction on climate
  7. Development to fuel change
  8. Does EU have role in stopping backsliding in Georgia?

Join EUobserver

Support quality EU news

Join us