The Danish government is bidding to end a three-year impasse on European Union negotiations with other countries about transparency on taxation of savings. Officials from Denmark, which holds the rotating presidency of the Council of Ministers, have called a series of high-level talks on the issue.
Member state officials dealing in taxation matters met on 2 February, but failed to make sufficient progress to force the issue onto the agenda of a gathering of national finance ministers on Tuesday (21 February). Danish officials hope further preparatory talks will permit it to be considered when the finance ministers hold their next meeting, in Brussels on 13 March.
At stake is the opening of discussions with five non-EU countries on the sharing of savings tax information with the EU. The EU wants to reach a deal with Switzerland and then deals with Liechtenstein, Andorra, San Marino and Monaco.
However, two EU countries, Luxembourg and Austria, have long opposed the opening of negotiations on anti-fraud agreements, because they fear that any agreement would impinge on their own culture of banking secrecy.
Since the end of 2011, pressure has increased on the EU to make some kind of breakthrough on the matter, as the UK and Germany have signed bilateral agreements with Switzerland. These do not require an exchange of personal information and therefore preserve banking secrecy – but the European Commission has said it will challenge the agreements, because they overlap with EU competencies.
Intensifying the urgency of an EU-wide approach, Austria has now announced that it will begin its own talks with Switzerland on a bilateral agreement. The leaders of the member states, who will hold a summit on 1-2 March, are expected to call for negotiating directives to be rapidly adopted.
Taxation of savings income has been deadlocked since June 2009, when national finance ministers called for “rapid continuation of work in order to find constructive solutions”.
The last three countries to hold the presidency of the Council of Ministers tried to make progress but in vain.
The anti-fraud agreements would bring standards in the five non-EU member states into line with the requirements of the inter-governmental Financial Action Task-Force. But they would not be as high as those that would be brought in within the EU and would subject Austria and Luxembourg to a mandatory higher level of automatic exchange of information than the non-EU countries.
Austria and Luxembourg fear that moves to curtail their own banking secrecy would result in a flight of capital to the five non-EU member states if they were not on an equal footing.
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