Carte blanche: The “end of bank secrecy” in Luxembourg means “extra” not “equal” access to data by national tax authorities in the EU, says Georges Bock of consultancy KPMG.
Luxembourg hit the headlines earlier this month, when a timeline was agreed [Financial Times paywall] with the EU for rolling out the automatic exchange of banking and fiscal data in Europe. In essence, this will bring the exchange of financial information within Europe up to a similar level as between Europe and the US under FATCA.
But the real story for individuals has yet to emerge. The devil, as they say, is very much in the detail.
The real story relates to anyone in the EU who holds a foreign bank account in an EU country. If this is the case for you, then your local tax authorities will have access to more data about your finances than if you had a domestic account.
What’s more, the “extra” information that tax authorities will have access to is of a particularly sensitive nature. As well as knowing the money you have coming in--dividends, sales proceeds and so on, which is needed to check your income tax return--they would also receive information on how much you have in your account at the end of each year.
With this new development, authorities will know how wealthy you are overall. As this information is not included in national systems, it strikes me as rather odd that it should be foreseen internationally.
All I’m arguing for is equivalent access, rather than extra access. If people want to retain at least some privacy with regards to their wealth, they will be forced to stay at home rather than being able to shop around for the most competitive bank account. This hardly encourages cross-border business.
Once more, we come back to the question of competiveness and a free market in Europe in the interest of consumers. Another situation where domestic business is favoured over cross-border service offerings.