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Within the framework of its coalition agreement, Austria's incoming Government has set out its stance on plans for a comprehensive automatic exchange of tax information within the European Union (EU).
In their 2013-2018 accord, Chancellor Werner Faymann's Social Democrats (SPÖ) and coalition partner the Austrian People's Party (ÖVP) pledged to push for a rapid implementation of the Savings Tax Directive at European level.
Both parties nevertheless made clear their demands that "negotiations with third countries on an effective exchange of data" be conducted and concluded swiftly. This will ensure a level playing field, in particular with EU third states Switzerland, Liechtenstein, Andorra, Monaco, and San Marino, thereby averting serious disadvantages for the Austrian economy, the alliance stressed.
Yet the united front hides a divided coalition, which will undoubtedly make discussions on the issue at the upcoming European Council gathering difficult.
While the SPÖ is eager to press full steam ahead and will readily relinquish banking secrecy, the ÖVP has adopted a much more cautious position. The ÖVP intends to maintain the withholding tax system for EU interest income, until such time as a level playing field has been secured with Austria's key competitors, Switzerland and Liechtenstein.
European Ministers are already openly frustrated by Austria and Luxembourg's decision to block a planned extension of the Savings Tax Directive at the recent ECOFIN summit in Brussels, and are therefore all the more determined to strike a deal by the end of the year.
Following the ECOFIN summit, EU Tax Commissioner Algirdas Šemeta warned that it is "incomprehensible," and "not just disappointing" that an agreement on the Savings Directive could not be reached. Šemeta stressed that this is "out of synch with the mood and resolutions at both EU and international level."
Given that this objective was not achieved by Finance Ministers, it will have to be pursued by the leaders themselves when they meet, Commissioner Šemeta insisted.
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