Agreement Of 'Equivalent Measures' Gives EU Savings Tax The Green Light
by Ulrika Lomas, Tax-News.com, Brussels
04 June 2004

Following Wednesday’s Ecofin meeting, it was announced that the Council of Finance Ministers has reached a unanimous agreements on “all matters of substance” with dependent and associated territories and certain other third countries in respect of the Savings Tax Directive.

“I am very pleased to report that the Commission was able to inform the Council today that not only Switzerland, but also Andorra, Monaco, San Marino and Liechtenstein have all agreed to put in place equivalent measures to those to be applied by the EU’s Member States as regards the taxation of income from savings,” announced Taxation Commissioner Fritz Bolkestein after Wednesday’s meeting.

Mr Bolkestein continued: “In particular, they have all agreed to impose a withholding tax on the interest income of EU residents at the same rate as Austria, Belgium and Luxembourg and to hand over 75 per cent of these revenues to the Member State of the EU resident concerned. They have also agreed to exchange information on request in criminal or civil cases of tax fraud or similar misbehaviour.”

The agreement marks the end of several years of painstaking negotiations, although the challenge remains to get the directive implemented on time and the European Commission is due to report back to the Council at the end of June detailing Switzerland’s commitment to have the measures in place by January 1 2005.

Liechtenstein has also expressed doubts that it will meet the deadline.

“I will of course be explaining to my Swiss friends the importance for both sides of finalising the timing of our agreements on all outstanding issues, including savings taxation, as quickly as possible,” said Bolkestein.

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