Wednesday, May 29, 2013
Luxembourg's Prime Minister Jean-Claude Juncker has defended the Grand Duchy's stance on automatic exchange of information, insisting that Luxembourg had not "blocked" progress at the European Council meeting in Brussels last week.
Luxembourg took the decision on April 10, 2013, to apply from January 1, 2015 automatic exchange of information on savings income, on the basis of the European Savings Tax Directive currently in force, Prime Minister Juncker explained, pointing out that this is a "definitive decision," independent of all other considerations on the issue. Luxembourg will apply from 2015, "exactly the same regime as the other European Union (EU) member states," Juncker made clear.
Alluding to plans to extend the scope of the Savings Tax Directive, the Luxembourg Minister underlined the need in the first instance to initiate negotiations with Switzerland and other third states, before taking a political decision. Juncker referred to the European Council's decision to agree on an extension at Ecofin level, once these discussions have taken place.
It will be "in light of the negotiations with third countries" that Luxembourg will decide to what extent the Directive could be enlarged, Prime Minister Juncker added, while underscoring his support for "quite a large extension," which would mean including foundations and UK trusts, as well as other financial products in the scope of the 2003 Savings Tax Directive.
Contrary to what has been said, Luxembourg is not blocking progress, Juncker emphasized, highlighting the link between extending the Directive and the European Commission's mandate to negotiate with third countries. Although negotiations with third states are not a condition, Luxembourg reserves the right to assess the revision plans "in the light of" the advances made in the talks.
If Switzerland and other third states fail to reach an agreement with the Commission, Luxembourg aims to evaluate the "global situation," Juncker noted. Urging that negotiations should begin as quickly as possible, to draw conclusions as soon as possible, Juncker stated that Luxembourg intends to make a decision at the end of the year. Juncker warned, however, that any negotiations should take place in respectful dialogue. Europe must not try to impose a unilateral package on Switzerland on a "take it or leave it basis," Juncker argued.
Concluding, Juncker said that Switzerland does not have to apply the same rules as the EU, but merely "equivalent regulations," with "equivalent effects." Finally, Juncker expressed his hope that Europe is able to convince others to adopt the same rules on transparency and on automatic information exchange, namely the G8 and the G20, following pressure from France, Germany, the UK and Italy.
Following the European Union Council meeting, Austrian Chancellor Werner Faymann welcomed the progress that had been made at the summit, insisting that important steps have been taken in the fight against tax evasion. Faymann underlined his view that by the end of the year there will finally be automatic exchange of foreign client banking data. Faymann nevertheless pointed out that banking secrecy will remain in place for Austrian citizens.
The Austrian Chancellor highlighted the importance of including countries outside of the EU in the discussions, and called for trusts and other similar structures to be included in any future mechanism.
Ending, Faymann maintained that action at EU level is vital for combating tax evasion worldwide. According to the Chancellor, "moral legitimacy increases if Europe has and implements common, strict rules." Only then can the EU drive forward plans at international level and make its demands, he continued. Alluding to the bilateral tax accord between Austria and Switzerland as a "transitional solution," Faymann stressed that the treaty would be superseded, once an agreement on automatic information exchange is reached.