EU finance ministers agreed yesterday to hasten an analysis and possible overhaul of EU rules on tax havens after Germany successfully pressed its European partners to take action.
The original deadline to deliver the document was October 2007. Ministers agreed to reschedule it to May 2008, when a new debate on tax havens has been added to the agenda of the Ecofin meeting in Brussels.
German Finance Minister Peer Steinbruck managed to get the apparent support of the majority of EU member states, including Belgium, which has so far been one of the most reluctant to accept any intervention on the topic. Austria and Luxembourg, sharing the same concerns as Belgium, remained opposed to an overhaul of the directive.
Taxation Commissioner Laszlo Kovacs underlined that “only after the report will it be possible to introduce legislative changes, if regarded as convenient”.
The reforms might include the extension of the EU rules against tax evasion. At the moment, the only measure in place to soften the effects of capital migrations for fiscal purposes is the taxation of interest payments on bank deposits in the owners’ country of residence, instead of the country where the account is based.
EU institutions are now considering extending these provisions to other returns on assets. Moreover, investment vehicles might be subject to tighter rules, with trust funds coming under particular focus.
The debate on fiscal havens was prompted by the suspected illegal use of financial trusts by wealthy German citizens who, according to Berlin, stash hundreds of millions of euro in secret bank accounts in Liechtenstein, one of the three European tax havens, together with Andorra and Monaco (see EURACTIV 03/03/08).
However, talks to modify rules on the subject, and extend them to extra-European tax havens such as Hong Kong, Macao or Singapore, are still expected to go on for a long time. French diplomatic sources underlined that the topic is not a priority of the coming French EU Presidency, which will replace Slovenia on 1 July and run until the end of 2008.