Recently we explored the welcome (if imperfect) news that the OECD had presented its report on a new global standard for countries and tax havens to exchange information with each other automatically: a brand new tool for fighting tax evasion. And a few days ago we reported on a European parliamentary vote to create public registries of companies and trusts in the EU.
Now, from Tax-News.com:
“European Union Tax Commissioner Algirdas Šemeta has confirmed that an agreement on plans to revise the European Union (EU) Savings Tax Directive is expected in March.
Furthermore, Tax Commissioner Šemeta expressed his conviction that the automatic exchange of information (AEI) for tax purposes will apply as the global standard from the beginning of 2016, and that an initial accord on an EU 11 financial transactions tax (FTT) will be in place in May.”
This mood of optimism signals potentially very good news in the pipeline. As we have indicated, the EU Savings Tax Directive, a scheme where European countries automatically share information with each other about the financial affairs of each others’ citizens, is full of holes. Powerful and innnovative Amendments now waiting in the wings have been obstructed for years by the actions of Switzerland, Austria and Luxembourg, among others.
But the global climate of tolerance for secrecy and tax evasion are changing fast, and we believe that those three countries may be giving signs of bowing to the inevitable.
The Tax-News story refers to an interview with Šemeta in Austria’s Witschaftblatt. Via an admittedly imperfect translation, it clear that Šemeta sees the Amended Directive as being complementary to the new OECD standards – in essence, the EU project will go right ahead, and it will be compliant with the standards. As he put it, via an admittedly imperfect translation:
“With the extended Savings Directive and the proposed Directive on Administrative Cooperation in Tax Matters, we almost already meet the proposed OECD standards. These two EU laws take the implementation of international standards in advance.”
There has been some softening in Austria’s and Luxembourg’s positions on the amendments to the Savings Tax Directive recently. Switzerland has been a hard nut to crack – we reported on its knee-jerk effective rejection of the OECD standard within hours of unveiling it – saying that it would wait until everyone else had adopted it before considering it – but there are signs that this position could be softening in the past few days. As Euractiv.com reported:
“We certainly can’t say that we’re now just going to wait until everyone has introduced automatic information exchange – that would be the wrong path to take,” Widmer-Schlumpf said.
When asked if that meant Switzerland had to move more quickly in relation to automatic information exchange, Widmer-Schlumpf said: “That is certainly the case.”
Is this is progress?. Well, behind the scenes we are receiving indications that the Swiss are (true to form) speaking with forked tongues on these issues. The deep shortcomings in the OECD process that we identified are going to be hard to overcome inside the OECD, due to the presence of the likes of Switzerland at the table. Swiss officials, egged on by their bankers, seem particularly keen to continue to exploit the vulnerabilities of developing countries. But we are certainly encouraged by the fact that the public discourse out of Switzerland seems to be changing. That alone is a big change. We need to keep up the pressure.
Semeta also said he expects a deal on a Financial Transaction Tax (FTT) to be in place by May. Also very welcome news.