This picture emerged late on Friday following a meeting of European finance ministers in Dublin, at which the fact that Cyprus will require more money than originally thought to secure its bailout was also discussed.
As reported here last week, five EU countries including the UK announced that they had agreed to develop and pilot a new “multilateral tax information exchange agreement” among themselves, based on a so-called "model intergovernmental agreement" (IGA) for complying with the US Foreign Account Tax Compliance Act that all five agreed to last year with the American tax authorities.
This came as EU finance ministers had already been discussing making changes to the EU Savings Directive that some said were aimed at bringing in some form of automatic information exchange. The Savings Directive originally came into force in 2005, and was conceived to enable EU taxpayers’ local tax authorities to identify when one of their taxpayers was is in receipt of savings income – for example, in a bank account in another EU country – that might not otherwise be declared.
The terms of the new FATCA-based tax information exchange agreement were set out in a joint letter last Tuesday, signed by the top finance representatives of the five countries, to Algirdas emeta, EU commissioner for Taxation and Customs Union.
In their letter, the five, who included UK chancellor of the exchequer George Osborne, called for their FATCA IGA-based scheme to be adopted by all the EU countries and, ultimately, the rest of the world.
Almost immediately a number of other EU countries, including Luxembourg, Poland, the Netherlands, Belgium and Romania, announced their general support for the concept. And in Dublin on Friday, emeta predicted that the EU finance ministers’ disucssions on the matter would be "formalised and turned into decisions without delay".
"I expect agreement on the stronger Savings Directive within weeks, along with a mandate to start negotiating with Switzerland and the other neighbours," he added, in a statement.
He noted that the European Council is due to resume its discussions on the matter of tax collection, and efforts to tackle tax evasion, next month.
Austria has continued to hold out against the plans, however, led by its finance minister, Maria Fekter, who, in interviews following the meetings in Dublin, reiterated her country’s belief in the importance of "bank secrecy".
"Automatic exchange of information involves a massive interference in peoples’ privacy rights," Fekter said, explaining the Austrian view.
