EU Talks On Savings Tax Directive Collapse
Talks over a European Union plan to tax non-residents'
savings have collapsed after Luxembourg and Austria have objected to the
plan and insist that if they have to make amendments to their banking
secrecy rules then so should other other tax havens such as Monaco, Lichtenstein
and Switzerland. 'Luxembourg's position is not open to change
and will not change,' said the principality's Prime Minister Jean-Claude
Juncker. Under the EU proposals, member states and
six non-EU countries (America, Switzerland, Liechtenstein, San Marino,
Monaco and Andorra) would be expected to share information on interest
they pay to individual savers resident in the other relevant countries.
For a transitional period of seven years, Belgium, Luxembourg and Austria
would apply a withholding tax instead of providing information, at a rate
of 15 per cent for the first three years and 20 per cent for the remainder
of the period. But Luxembourg and Austria fear that many accounts could disappear across
the border, and want an agreement that the same provisions be forced on
non-EU members such as Switzerland. EU Commissioner Frits Bolkestein was not
amused at the news, saying: 'It would be very disappointing if member
states try to renegotiate a unanimous agreement. New proposals presented
by the Commission in July were based on that unanimous agreement.' The talks are due to begin all over again
at the Laeken summit on 13 December just a few days before the planned
launch of the euro. .
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