Saturday

13th Aug 2022

Top five EU states push for tax transparency

  • Austria and Luxembourg have been opposed to loosening rules on bank secrecy (Photo: Images_of_Money)

France, Germany, Italy, Spain and the UK have agreed to more automatic exchanges of banking data to fight tax evasion, increasing pressure on Austria and Luxembourg to give up their veto on the equivalent EU bill.

In a joint letter to the EU commission sent on Tuesday (9 April), the finance ministers of the five largest EU countries say they have agreed on a "pilot" project of "automatic information exchange" aimed at fighting tax evasion.

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

The initiative is open to other member states and is based on a recently adopted law in the US - the Foreign Account Tax Compliance Act - that requires US citizens to declare their bank accounts held abroad and foreign banks to notify US tax authorities about their American clients.

A similar EU-wide law has so far been held up by Austria and Luxembourg, both keen on preserving bank secrecy for domestic and foreign clients.

The five finance ministers "call on all EU member states to agree without delay" on the bill, so that "Europe can take a lead in promoting a global system of automatic information exchange, removing the hiding places for those who would seek to evade paying their taxes."

The collapse of the Cyprus banking system - which like Luxembourg's was much larger than the country's GDP - and a series of revelations about the offshore banking model have increased pressure on Austria and Luxembourg to change their position.

Luxembourg has already signalled "openness" to discuss bank secrecy. And on Tuesday, Austrian Chancellor Werner Faymann told the Kleine Zeitung his country was "ready for talks on a more intensive exchange of information on international investors."

But added that bank secrecy will remain in place for domestic customers and said it would be "absurd" for an Austrian grandmother to have to show her savings accounts to the Austrian finance minister.

The comments came after a spokesman for EU tax commissioner Algirdas Semeta said it was "unacceptable" that Austria was refusing to reform its banking secrecy laws.

Semeta also welcomed the initiative of EU's five largest countries and said in a statement this it may "speed up" the EU efforts. "

"Transparency is the key when it comes to fighting tax evasion and the global environment today leaves little room for those who resist it," Semeta said.

Luxembourg may loosen bank secrecy

Luxembourg may consider opening up its massive banking sector to greater scrutiny following concerns people are stashing away wealth from foreign tax inspectors.

Austria attacks UK, as EU finance talks get ugly

Austria has accused the UK of being a haven for money launderers ahead of an EU meeting in Dublin, with Cyprus, Ireland, Portugal and Slovenia's (potential) bailout needs also on the agenda.

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.

Brazil pitches itself as answer to Ukraine war food shortages

Brazilian president Jair Bolsonaro is pitching his Latin American country as the answer to the world food crisis following the war in Ukraine. The traditional wheat importer has now exported three million tonnes of the grain so far in 2022.

Opinion

Exploiting the Ukraine crisis for Big Business

From food policy to climate change, corporate lobbyists are exploiting the Ukraine crisis to try to slash legislation that gets in the way of profit. But this is only making things worse.

Stakeholders' Highlights

  1. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  2. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  3. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  4. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  5. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  6. Council of the EUEU: new rules on corporate sustainability reporting

Latest News

  1. Defying Russian bombs, Ukraine football starts 2022 season
  2. Sweden to extradite man wanted by Turkey
  3. EU must beware Beijing's new charm offensive
  4. Forest fire near Bordeaux forces over 10,000 to flee
  5. Estonia and Latvia sever China club ties
  6. Russian coal embargo kicks in, as EU energy bills surge
  7. Only Western unity can stop Iran hostage-diplomacy
  8. Kosovo PM warns of renewed conflict with Serbia

Join EUobserver

Support quality EU news

Join us