Portugal Steps Into Ring For EU Withholding Tax Slugfest

Tax-news.com

25 January 2000

European tax harmonisation plans will again be high on the agenda of EU Finance Ministers when they meet in Portugal at the end of this month, but no agreement is yet in sight. The main item on the agenda for that meeting will be to attempt once again to find a compromise solution to the current stand-off between the UK and supporters of Germany and France over the controversial proposal to introduce a 20% European withholding tax on savings.

The host of the meeting and current holder of the EU Presidency is Portugal, whose Finance Minister Joaquim Pina Moura is an unashamed supporter of the EU's tax harmonisation plans. Mr Pina Moura met with UK Chancellor Gordon Brown last week in an unsuccessful attempt to persuade the UK to back down from their current hardline position that they will veto the tax, if not the whole plan. The UK's stubborn opposition to any compromise solution was also voiced by Foreign Secretary Robin Cook who said Portugal was wasting its time trying to convince the UK to compromise.

Add to this the recent conflict and tension between Britain and Europe, especially with France over issues such as the British beef ban, and the upcoming meeting looks a sure bet to produce even more fireworks than the last meeting under the Finnish presidency which turned into a media slanging match between Gordon Brown and his German and French counterparts.

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