Luc Frieden (left) speaking with Klaus Regling in Brussels on Friday
Photo: European Council
Brussels: The European tax commissioner called out the Grand Duchy during a summit of finance ministers, but Luc Frieden says Luxembourg is not obstructing progress on data sharing.
The European tax commissioner has called on Luxembourg and Austria to stop blocking an EU data sharing deal, with the Grand Duchy’s finance minister retorting the same rules ought to apply across the board.
“It is clear that the era of banking secrecy is coming to an end”, Algirdas Šemeta said in a speech during a meeting of European finance ministers in Brussels on Friday. Luxembourg’s outgoing finance minister Luc Frieden attended the monthly summit.
Šemeta was lobbying for passage of a proposed revamp of internal EU rules, called the EU Savings Directive, by the end of the year.
The European Commission has entered formal negotiations on the “automatic exchange of information” and sharing “accurate and complete information on real beneficial owners” with non-EU jurisdictions Andorra, Switzerland, Liechtenstein, Monaco and San Marino, Šemeta noted, so cooperation within the union should “keep pace with progress”.
Luxembourg and Austria have objected to the intra-EU draft, saying the same standards should apply to the Swiss and other countries in which Brussels has struck tax accords.
EU, OECD, US deals
The Grand Duchy has increased its level of international tax cooperation since the spring. Luxembourg signed tax information agreements with the OECD, a group of 34 wealthier countries; entered formal negotiations with the US government to join America’s FATCA fiscal intelligence regime; and said it would join the EU Savings Directive’s automatic data exchange provisions, instead of participating in only its withholding tax system.
At the same time, for months Frieden has consistently called for a more “level playing field” and for a global agreement on data sharing.
But the European tax commission said circumstances have changed in recent months, such as a new tax agreement between Singapore and the US.
“To Luxembourg and Austria in particular, I say--you need to recognise the changes that have occurred since you first spoke of a level playing field,” Šemeta told the assembled finance ministers last week. “In particular, the EU is no longer making the first move. The world is already moving. And the EU must not be left behind.”
Talks in progress
Following the Brussels meeting, Frieden told reporters that the Grand Duchy was not trying to stop automatic exchange of information between tax authorities. The country is simply waiting for the commission to conclude the current round of international negotiations with the five states, and wants the same standards applied to all jurisdictions.
Frieden said he did not think accords would be finalised by the end-of-year deadline.