EU Finance Ministers meeting at Santa Maria da Feira in Portugal on Sunday made progress on the withholding tax dossier, and agreed to meet one last time on Monday before the EU leaders' summit opens in an attempt to bridge the remaining gaps in a plan put forward by Portugal.
With a last-minute conversion on the part of Belgium and Germany, all countries other than Austria and Luxembourg now agree that information exchange is the way forward. Countries which had been holding out for the option to impose the tax or to exchange information have now given in to the majority view that mandatory information exchange should replace the optional situation after a period of probably five years.
A new element in the process of building a consensus deals with Gordon Brown's insistence on including key offshore financial centres and other leading OECD nations in the information exchange network - now it is suggested that any deal would be frozen for two years to give time to bring in these outside parties, and there would be a final vote as to whether the external deals were satisfactory before the deal came into effect.
Austria's resistance can be supposed to be tied up with its efforts
to be re-admitted to the EU sunshine, and the banking secrecy
issue is too big a bargaining chip to be given away in advance
of the leaders' summit. After giving in on the Sparbuch (anonymous
pass book) issue, Austria is unlikely to want to fight much longer
on banking secrecy in general. That leaves little Luxembourg,
which is looking into a black hole if it loses on the information
exchange issue.
Whether a solution is found or not on Monday, the tortuous path followed by the EU's withholding tax proposal since 1996 will be seized upon by the majority of EU leaders as evidence that the unanimity requirement has passed its sell-by date in Europe, especially in the context of enlargement to a prospective total of 28 nations. If the veto is preserved on tax, will the applicant nations believe that the EU sincerely wants them to join? But if it goes, or if the rule allowing majority decisions on single market issues is stretched to include dossiers like withholding tax, then what future is there for Luxembourg's banks or the City of London's Eurobond business?
This may be a defining moment in the history of the EU. The Procrustean bed of 'ever-closer-union' may be about to claim a major scalp (or foot, should it be?); on the other hand, the Union has in the past shown a magnificent ability to fudge at such times, and may succeeed once more in squaring the circle.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment