Luxembourg, Austria, And Belgium Offered New Concessions Over Savings Tax

by Ulrika Lomas, Tax-News.com, Brussels

20 January 2003

The Financial Times reported on Friday that the Greek EU Presidency has formulated a new plan which it hopes will secure the cooperation of Luxembourg, Austria and Belgium over the EU's Savings Tax Directive.

A document, seen by the FT last week, revealed that at tomorrow's meeting, the three countries will be told that they are free to levy a withholding tax of up to 35%, moving to automatic information exchange on the savings interest of non-resident account holders only if non-EU members such as the United States and Switzerland agree to do so.

According to the FT:

'The Greek plan, handed to the EU's 15 ambassadors in a sealed envelope on Wednesday, states that Austria, Belgium and Luxembourg would levy a tax of 15-20% on non-residents savings between 2004 and 2007. The tax would rise to 25% between 2007 and 2009 and reach 35% after that.'

The report went on to add that in addition to the staggered introduction of the withholding tax, the three countries: 'are no longer obliged to move to information exchange under the OECD rules from 2011, as stated in the December compromise. Instead, a unanimous vote by the EU's 15 states would be needed before they move to automatic exchange of information.'

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