“Encouraged by recent international developments to improve transparency and administrative cooperation” on taxation matters, the European Commission reiterated, on 15 February, that it is “more determined than ever to promote information exchange at the largest scale possible”.
It has accordingly held “very constructive discussions” with Germany and the United Kingdom to make their Rubik agreements compatible with European rules on savings taxation. “We agreed on the need to remove from their scope” all products covered by existing European rules on savings taxation and those that may be covered in the future. “This should enable us to put this problem behind us and concentrate on the intra-EU negotiations” on the taxation of earnings on savings.
So that's the end of the Swiss deal then.
And we're on track for real automatic information exchange it seems.
Maybe not overnight. But it seems like some people are really seeking to be courageous on this issue.
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More stick to Switzerland in the announcement …
“…the scope of the agreement will have to be limited to dividends, capital gains and wealth tax.” There is also no question of granting Switzerland, in exchange, too many advantages on access to financial services markets (one of Bern’s demands): the Union’s “external competence” in this area must be respected. ”
What’s the point of having a Rubik tax, if you have to exchange info on who earns interest. End of Rubik, no more discussion..
Another nail in the coffin, which was not needed is the German SPD opposition party has also vetoed the deal.
And where are the trolls like Darren who swore that the EU Commission would dare not intervene?
Agreed: these trolls are of so brave when they think they’re winning
But all go quiet when their claims are shown to be false
There is already automatic exchange between 25 EU member states. However, Luxembourg and Austria refuse categorically to apply that regime. And since tax issues can only be decided unanimously they are able to frustrate the Commission’s desire to extend it to the entire EU and beyond.
Luxembourg and Austria have made extremely clear that their positions are final and non-negotiable. That will not change regardless of what happens to the Swiss deals.
And respectfully, hat was said before the first ESTD as well
So let’s stop pretending these things do not happen when they very clearly do.
But if the first EUSTD allowed exceptions for Luxembourg and Austria, why should the second version be any different?
because it was always agreed they would expire
Automatic exchange did not happen EU-wide at the time of the first ESTD because Luxembourg, Austria and Belgium opposed it. Belgium has in the mean time changed position, but the other two have most definitely not.
Actually, the EU Commission itself is hedging its bets. The wording of the statement talks of information exchange “at the largest scale possible”. This is very different from automatic exchange.
Do you think they’re really rake this on for no gain?
It does not look like Austria and Luxembourg ever anticipated a scenario in which these exceptions could actually expire. They may have been a little naive during the negotiation of the 2003 directive, but that it is irrelevant. Because of the way the EU votes on cross-border taxation, they can hold back any progress on the new ESTD unless the EU agrees to roll-over the exceptions, possibly indefinitely.
The interesting question is, as with all European political negotiations, what other member states can offer Austria and Luxembourg that would be game-changing enough to make them change their positions. It is not an easy: both are very wealthy states, net contributors to the EU, and politically very close to the core of Europe, ie. Germany. There are very few pressure points to apply.
Hi Jason
You are in the dark regarding the EUSD and its amendments and Luxembourg / Austria’s position Read the “Latest News” updates on my website
Mark, I don’t think I am in the dark at all. The analysis you carry on your website confirms that Luxembourg and Austria are blocking any progress on the new ESTD, not because they substantially disagree with its content, but because they refuse to switch to automatic exchange.
What is new to me, on the basis of your website, is that the EU has essentially accepted Luxembourg and Austria’s position: as you write it, it has been agreed “to keep the issue of the transitional period separate from the discussions on the amendments to the Savings Tax Directive”. That very much sounds like an admission by the EU of its inability to break these two countries’ resolve.
Your webiste is otherwise very instructive.
Jason,
LU / AT will hold out on banking secrecy as long as Switzerland does. Therefore the EU Commission tactic now is to go after Switzerland to relent. This will be done, as they say, via the small carrot and big stick approach.
Mark – thank you for the humorous reply. I am more than a little skeptical though.
First of all, I am not sure at all that Austria’s and (especially) Luxembourg’s positions are conditional on Switzerland’s. In both countries, there is extreme resistance to lifting the banking secrecy irrespective of what Switzerland does. In fact, Switzerland’s relevance to their decision-making has probably decreased quite dramatically. Of at least as significant concern for Luxembourg and Austria are places like Singapore and Hong Kong, over which the EU has strictly no leverage whatsoever.
Second, the EU COMMISSION might be talking a big game about market access and, again news to me, trade sanctions, but it has no authority to implement any of these measures. That is for the member states to decide, not the Commission. Everything is possible, but considering that the EU is barely able to articulate a common policy against Iran, I would say that the probability of agreeing on sanctions against Switzerland is basically nil. Remember also that there are only two EU member states that have really some leverage against Switzerland: Germany and (less so) France. Neither of these nations will do anything in the foreseeable future: Germany because it is still committed to getting through some version of Rubik, France because it is desperately trying to sell Switzerland a few fighter jets.
I find your cartoons very entertaining.
Good news indeed, Richard, but one can’t help but be left wondering: a. what Hartnett and other HMRC staff thought they were up to as public servants negotiating these deals (apart, obviously, from benefitting the feral rich), b. how much it cost in their time, expenses, admin and so on. All paid for by the taxpayer and at a time when that money could have been spent by HMRC on far more productive activities.
On which point, now someone has leaked information to The Guardian on the dodgy tax deals within the DoH (a situation readers of Private Eye will have been familair with) – and this likely to open a can of worms with government (and much the same going on in local government I suspect) – HMRC will be busy over the coming months.
I will be in the Guardian later on DoH
This is corruption at the heart of government
Odd how it helps the best off, isn’t it?