Tuesday

12th Dec 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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

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.

Commission wants more centralised eurozone by 2019

EU leaders will discuss at their summit next week the commission's proposals, which include a European Monetary Fund and an EU finance minister - but no eurozone budget, as proposed by French president Emmanuel Macron.

EU blacklists 17 tax havens, avoids sanctions

Finance ministers pointed out 'non-cooperative' entities and set up a second 'grey' list of more than 40 countries that have promised to improve their tax practices.

News in Brief

  1. EU to Israel: Don't expect us to move embassies
  2. EU Commission condemns anti-semitic 'Jerusalem' protests
  3. Ministers have 'lots of questions' on new CAP plans
  4. Commission: Brexit agreement is 'deal between gentlemen'
  5. 25 EU states sign defence cooperation pact
  6. Netanyahu wants 'hardy' talks with EU on Jerusalem
  7. French centre-right elects new leader
  8. Germany and UK increase arms sales

Stakeholders' Highlights

  1. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  2. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  3. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  4. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  5. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  6. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  7. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  8. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  9. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  10. EPSUEU Blacklist of Tax Havens Is a Sham
  11. EU2017EERole of Culture in Building Cohesive Societies in Europe
  12. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage

Latest News

  1. Alignment with EU is 'last resort', May tells MPs
  2. Iceland: further from EU membership than ever
  3. Israel presses Jerusalem claim in EU capital
  4. From dark coal toward a brighter future
  5. UK casts doubt on EU deal in 'bizarre' twist
  6. Romania wants EU signal on Schengen membership
  7. Germany says China using LinkedIn to recruit informants
  8. No chance of expanding EU warrant crime list