EU Savings Tax Directive Pushed Back By Six Months
by Ulrika Lomas, Tax-News.com, Brussels
24 June 2004

The European Union has finally bowed to the inevitable and opted to delay the implementation of the Savings Tax Directive by six months in order to give certain third countries more time to implement the necessary 'equivalent measures'.

The decision follows a closed doors meeting between EU representatives this week, where it was decided that the original January 1 2005 deadline must be pushed back to July 1 2005, in order to prevent the emergence of an uneven playing field between EU members and the third countries compelled to adhere to the information-sharing directive.

The move comes after repeated warnings by the Swiss government that “in no case” could its parliamentary procedures be completed in time so soon after a final agreement with the EU was struck last month.

The Swiss have also warned the European Commission that the new July 1 deadline can only be met "in the absence of a referendum”.

Under Swiss law, voters have 100 days after a law is published to collect sufficient signatures in a petition to challenge the legislation. Reports suggest the country’s anti-EU coalition is confident that it can gather the 50,000 signatures required to put the new law to a vote.

Whilst Swiss Economic Ministry spokesman Manuel Sager, speaking to the Associated Press, said the government welcomed the additional time afforded by the EU’s decision, he conceded that a referendum “may or may not jeopardize the date."

Further compounding the EU's problems, all 25 member states must agree that appropriate equivalent measures are in place in the third countries, including Liechtenstein, Andorra, Monaco, San Marino and the British and Dutch dependent territories.

Member states Austria and Luxembourg, particularly sensitive on the issue of banking secrecy, have insisted that the directive must only go ahead if implemented simultaneously in all relevant jurisdictions.