Thursday

27th Apr 2017

'Bank secrecy to die' after Austria and Luxembourg back EU law

  • Luxembourg's banking and financial industry has more than €3 trillion in assets (Photo: Cesar Poyatos)

Austria and Luxembourg at a summit on Thursday (20 March) in Brussels agreed to back EU plans to increase transparency in tax reporting.

"We confirmed today that this is the course we want to follow," Luxembourg Prime Minister Xavier Bettel said.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The two countries had delayed endorsing EU reforms on the tax savings directive over the past six years of negotiations.

The political agreement means the updated directive is set to be adopted next Monday, before it is transposed into national law over the next two years.

EU Council chief Herman Van Rompuy in a statement said the agreement “is indispensable for enabling the member states to better clamp down on tax fraud and tax evasion.”

He noted Europe is now committed to the new single global standard for automatic exchange of tax information.

"All member states are firmly on board … Banking secrecy is set to die,” he said.

Additional pressure to back the EU law was piled on the two countries after G20 finance ministers in February called for a global standard in 2015.

The US Fair and Accurate Credit Transactions Act (Facta), a unilateral decision that makes banks operating in the US provide information on savings, also played a role.

For her part, Catherine Olier, a tax expert at British charity Oxfam, said Austria and Luxembourg started moving toward an EU agreement after the US passed Facta.

“This unilateral decision forced Austrian banks and Luxembourgish banks to provide information,” Olier told this website.

The European Commission says the reformed directive is needed to better identify and chase up tax evaders and to close loopholes on pensions and investment funds.

Member states, under current rules, do not share data on interest earned from financial products linked to investment funds, pensions, trusts or foundations.

The new legislation aims to tackle cross-border tax evasion by creating an information exchange system for governments to help identify individuals that receive savings income in a member state other than their own.

Twenty-six member states currently apply the old version of the EU law on automatic exchange of information.

Austria and Luxembourg do not, after being granted a transitional period, in which they applied a withholding tax on interest payments made on savings.

Both countries had also refused to sign up unless non-EU banking countries like Switzerland and Liechtenstein agree to apply the standard.

EU taxation commissioner Algirdas Semeta earlier this month said the countries are now ready to work towards alignment with the EU on the issue.

Dublin to scrap 'double Irish' tax loophole

Ireland is to scrap its controversial tax loophole, as EU countries agree new legislation to claw back the €1 trillion lost to tax cheats each year.

Eurogroup makes 'progress' on Greek deal

Eurozone ministers endorsed an agreement in principle between the Greek government and its creditors over a new package of reforms. But talks on fiscal targets and debt could still block a final agreement.

New anti-trust complaint looms over Microsoft

At least three security software companies “met several times” with the European Commission to complain about Microsoft’s alleged abuse of its market position. A formal case could follow.

Commission stops German-British stock merger

The decision to block the merger of the London Stock Exchange and Deutsche Boerse was expected, as negotiations between the parties broke down a few weeks ago.

New anti-trust complaint looms over Microsoft

At least three security software companies “met several times” with the European Commission to complain about Microsoft’s alleged abuse of its market position. A formal case could follow.

Investigation

MEPs oppose EU agency to prevent Dieselgate II

The European Parliament said on Tuesday that there should be more EU oversight on how cars are approved, but stopped short of calling for an independent EU agency.

News in Brief

  1. EU parliament moves to lift Le Pen's immunity
  2. EU Commission launches probe into Hungary's university law
  3. Scots slowly losing appetite for independence - poll
  4. Council of Europe puts Turkey on watch list
  5. EU to put parental leave on political agenda
  6. Israel cancels German meeting over human rights groups
  7. Hungary's Orban will participate in EU parliament debate
  8. Malta floats cash-for-refugees plan

Stakeholders' Highlights

  1. UNICEFRace Against Time to Save Millions of Lives in Yemen
  2. Nordic Council of MinistersDeveloping Independent Russian-Language Media in the Baltic Countries
  3. Swedish EnterprisesReform of the European Electricity Market: Lessons from the Nordics, Brussels 2 May
  4. Malta EU 2017Green Light Given for New EU Regulation to Bolster External Border Checks
  5. Counter BalanceCall for EU Commission to Withdraw Support of Trans-Adriatic Pipeline
  6. ACCAEconomic Confidence at Highest Since 2015
  7. European Federation of Allergy and Airways60%-90% of Your Life Is Spent Indoors. How Does Poor Indoor Air Quality Affect You?
  8. European Gaming and Betting AssociationCJEU Confirms Obligation for a Transparent Licensing Process
  9. Nordic Council of MinistersNordic Region and the US: A Time of Warlike Rhetoric and Militarisation?
  10. European Free AllianceEFA MEPs Vote in Favor of European Parliament's Brexit Mandate
  11. Mission of China to the EUXinhua Insight: China to Open up Like Never Before
  12. World VisionViolence Becomes New Normal for Syrian Children

Latest News

  1. EU starts legal action against Hungary
  2. Brexit is about Europe's future as well
  3. Power struggle in Greenland: Three reasons why the EU should care
  4. Nordic and Baltic countries step up digitalisation efforts
  5. European states still top media freedom list
  6. Let’s not put European public health at risk
  7. Threatened Budapest university calls for EU support
  8. Orban set to face down EU threats