Austria, Luxembourg Agree To EU Tax Recovery Directive

During a recent meeting of the European Council of Finance Ministers, Luxembourg and Austria – two countries with a long tradition of banking secrecy – agreed to a draft directive aimed at strengthening mutual assistance between member states in the recovery of taxes.

The draft directive is aimed at better fulfilling the member states' needs with regard to the recovery of taxes, providing an overhaul of Directive 76/308/EEC (codified by Directive 2008/55/EC), on the basis of which the member states have engaged in mutual assistance since 1976 aimed at clamping down on tax evasion.

The draft directive is intended to provide for an improved assistance system, with rules that are easier to apply, as regards information held by banks and other financial institutions, and provide for more flexible conditions for requesting assistance, requiring the spontaneous exchange of information.

According to Austria’s Vice Chancellor and Finance Minister, Josef Pröll, the agreement is a clear sign that both Austria and Luxembourg are prepared to find solutions to key issues.

Previously, Pröll had argued that the tax recovery directive should be examined alongside the reform of the EU Savings Tax Directive and the Mutual Assistance Directive. Defending his decision, however, Pröll revealed that he did not want to unnecessarily delay progress.

Under the new draft directive, all EU member states must provide information in accordance with Article 26 of the Organization for Economic Cooperation and Development’s (OECD's) model agreement on tax information exchange, Pröll explained. Austria agreed to conform to the OECD standard last year, he remarked.

Pröll gave his assurances that Austria is also prepared to agree to other standards. The Spanish EU presidency is endeavoring to reach an agreement on the tax package in the first half of 2010.

Austria and Luxembourg have announced, however, that they are only willing to accept the amended EU Savings Tax Directive provided that Switzerland, Andorra, Liechtenstein, Monaco and San Marino apply the same or similar rules on transparency. Indeed, both EU member states intend to maintain their banking secrecy until Switzerland agrees to participate in an automatic exchange of information.

The draft directive will be adopted at a forthcoming Council meeting, once the European Parliament's opinion is available.

Quelle: Tax-News.com

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