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Austria Eyes US FATCA Deal

Friday, May 10, 2013

Austrian Chancellor Werner Faymann has announced plans to enter into talks with the US and with the Organization for Economic Cooperation and Development (OECD), aimed at combating tax fraud and tax evasion.

Following a recent Council of Ministers meeting, Chancellor Faymann revealed that the Austrian Government has adopted two resolutions, designed to strengthen the fight against international tax evasion. Austria intends to sign an agreement with the US tax authorities, implementing the Foreign Account Tax Compliance Act (FATCA), and to sign the OECD Convention on mutual assistance in tax matters, the Chancellor emphasized.

Underlining the fact that the Austrian Government is united in its stance and plans to negotiate together, Faymann stressed that Austria is pursuing "a clear, constructive path in the fight against tax evasion." Austria is determined to ensure that both tax havens, such as the Channel Islands, and hidden ownership structures, such as trusts, are transparent, the Chancellor made clear.

Highlighting the fact that Austria firmly supports negotiations between the European Commission and third states, Faymann concluded by underscoring that Austria is playing a pivotal, constructive, and clear role in combating tax flight.

Austrian Chancellor Faymann and Deputy Chancellor Michael Spindelegger confirmed Austria's willingness "to participate constructively" in negotiations between the European Union (EU) and third states on an automatic exchange of banking information at the end of April.

At the time, Faymann and Spindelegger underlined that Austria is not a tax haven and highlighted the Government's commitment to ensuring that the international fight against tax fraud is successful and to ensuring that Austria plays a committed part in this fight.

For this reason, Austria intends to participate constructively in negotiations between the EU and third states on the adoption of European Savings Tax Directive regulations, the Ministers explained, while underlining the need for certain conditions to be met.

Faymann and Spindelegger stressed that any information exchange must at least comply with the OECD standard, and that the negotiating mandate must ensure that the beneficial owners of corporate structures, such as shell companies and trusts, are identified in all cases by the tax authorities. Finally, the Ministers made clear that the bilateral tax agreements between Austria and Liechtenstein and Austria and Switzerland must be treated separately.

Austrian banking secrecy for Austrian taxpayers must not be affected by any considerations at EU level, and the mechanism must remain in its current form, the Ministers reiterated.

Concluding, the Ministers emphasized that Austria would only agree to an extended Savings Tax Directive, if this is actually an appropriate means with which to effectively prevent tax evasion and tax fraud.

The Austrian Chancellor expressed his hope that an agreement with the EU on an automatic exchange of banking information would be reached ahead of the EU Council meeting on May 22. Defending the Government's stance and willingness to negotiate, Faymann warned that gaining the reputation of a country that protects tax cheats would be far worse than any potential relocations that might ensue.