21st Jan 2021

EU scraps bank secrecy to catch cross-border tax evaders

EU finance ministers on Tuesday (7 December) agreed to remove bank secrecy as a reason for blocking cross-border tax fraud investigations, in a bid to find fresh resources for cash-strapped state coffers.

"Tax evaders can no longer exploit bank secrecy as an excuse," EU taxation commissioner Algirdas Semeta said after the meeting.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Cross-border tax fraud will no longer hide behind bank secrecy (Photo: Flickr)

He called the deal "a huge step forward in the fight against tax evasion and tax fraud in the EU" at a time when budgets are under huge pressure amid the widespread drive to bring down public deficits.

The agreement will introduce time limits for national tax authorities to answer requests for information on citizens or businesses and parameters for the "automatic" exchange of information.

Targeted is all "income from employment, directors' fees, dividends, capital gains, royalties, certain life insurance products, pensions, and ownership of and income from immovable property." The new rules will apply from 1 January next year, but they will not be retroactive.

The deal has been blocked for almost a year by Austria and Luxembourg, whose national systems still allow for banking secrecy. They still managed to limit the extent to which "automatic" exchange of tax information will be carried out, with only five categories of income and capital, rather than eight, as originally proposed by the European Commission, to be included in the new measures.

The remaining three may be added later, in 2017, when the EU executive is set to review the policy.

Vienna and Luxembourg also managed to get an obligation for the tax authorities to ask information on specific suspects, ruling out general searches for tax evaders.

Luxembourg's finance minister Luc Frieden was quoted by DPA as saying he obtained important concessions, especially the fact that "fishing expeditions are not permitted" and that the list did not include savings, meaning "banking data."

Mr Frieden said the deal leaves individuals "the possibility to manage their resources across frontiers, guarding their privacy while being cooperative in the fight against fiscal fraud."

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Warsaw and Budapest seek EU funds despite national veto

A senior EU diplomat said Poland and Hungary should lift their veto or give a signal they are willing to do by Tuesday - otherwise there will be alternative plans for a recovery fund with the other 25 member states.

Germany asks capitals to give a little in EU budget impasse

European Parliament negotiators are demanding €39bn in new funding for EU programmes such as Horizon research and Erasmus, in talks with the German EU presidency on the budget. Meanwhile, rule-of-law enforcement negotiations have only just begun.

EU budget talks suspended in fight for new funds

MEPs are requesting additional, new funding of €39bn for 15 EU programs. The German presidency argues that budget ceilings, agreed by EU leaders at a marathon summit in July, will be impossible to change without a new leaders' meeting.

News in Brief

  1. Brexit prompted finance exodus from UK to France
  2. Italian PM Conte wins confidence vote in Senate
  3. Borrell washes hands of EU's Venezuela policy
  4. Russia backs Greece in eastern Mediterranean dispute
  5. 'Ski-holiday' Switzerland reaches new infection high
  6. Germany extends lockdown, others expected to follow
  7. Barnier to be Brexit special adviser to von der Leyen
  8. EU commisioner to visit Bosnia's Lipa migrant camp

Budget deal struck, with Hungary threat still hanging

Ultimately, the European Parliament managed to squeeze an extra €16bn in total - which will be financed with competition fines the EU Commission hands out over the next seven years, plus reallocations within the budget.

Stakeholders' Highlights

  1. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  2. CESIKlaus Heeger and Romain Wolff re-elected Secretary General and President of independent trade unions in Europe (CESI)
  3. Nordic Council of MinistersWomen benefit in the digitalised labour market
  4. Nordic Council of MinistersReport: The prevalence of men who use internet forums characterised by misogyny
  5. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!
  6. UNESDAMaking healthier diets the easy choice

Latest News

  1. MEPs call to halt Russia pipeline over Navalny arrest
  2. EU targets vaccinating 70% of adults by summer
  3. Portugal pushes to start delayed 'future EU' conference
  4. EU Parliament pressing for inquiry into Frontex
  5. Untapped potential of the single market could boost European recovery
  6. Biden's 'Age of Aquarius'? Mars and Venus will clash over China
  7. The new dimension of 'ever-closer union'
  8. What do new CDU chief's pro-Russia views mean for Europe?

Join EUobserver

Support quality EU news

Join us