Talks Stalled With Four Jurisdictions On Savings Tax Directive

by Ulrika Lomas, Tax-News.com, Brussels

10 February 2004

It has emerged from media reports that Europe’s Internal Market Commissioner, Frits Bolkestein is unhappy at the progress being made between the EU and a number of European jurisdictions concerning their adoption of the European Savings Directive.

Consequently, it is anticipated that Bolkestein will inform European finance ministers today that there has been an unacceptable level of progress made in the EU’s negotiations with Andorra, Monaco, Luxembourg and Liechtenstein, intended to persuade them to accept the terms of the directive.

"It's a case of nobody wanting to make the first move," commented an EU official, according to the Financial Times.

The European jurisdictions, in addition to the overseas territories of the UK and the Netherlands, must adopt rules facilitating exchange of banking information, or apply a transitional withholding tax by June 30 in order for the directive to be implemented by January 1 2005.

Nevertheless, despite the apparent impasse, Bolkestein is said to be optimistic that the deadlock will be broken ahead of the June deadline.

"Things have much advanced," Prince Nikolaus of Liechtenstein told Reuters last week.

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