A Push Against Tax Havens Gains Support in Europe

DUBLIN — Europe’s efforts to crack down on tax havens gained momentum on Saturday as finance ministers from nine countries agreed to share more bank information. Ministers from Belgium, the Netherlands and Romania joined their French counterpart in a push for more automatic exchanges of bank records that already had the backing of Britain, Italy, Poland and Spain. For France, the issue has taken on greater urgency since Jérôme Cahuzac, the former budget minister, quit after he acknowledged having foreign holdings in Switzerland that he previously denied.

“The surge in member states’ appetite for progress and action in the fight against evasion is extremely welcome,” Algirdas Semeta, the European Union commissioner for taxation, said at a news conference on Saturday after two days of meetings where ministers discussed adoption of Europe-wide laws modeled on the Foreign Account Tax Compliance Act, a United States initiative to find hidden accounts overseas.

“The tools are already on the table, waiting to be seized,” said Mr. Semeta, referring to plans in Europe to provide greater exchanges of information on interest earned on savings, including from trusts and foundations.

Mr. Semeta said that the European crackdown against tax evasion could eventually extend to dividends, capital gains and royalties, significantly expanding the revenue earned by national treasuries. He also encouraged countries to bring forward a date, currently foreseen for 2017, when those revenues are meant to fall under the microscope. Europe is also being pushed toward greater transparency by the recent release of an investigative report on thousands of offshore bank accounts and shell companies, and by the prospect of a meeting of finance ministers from the Group of 20 leading economies next Thursday in Washington, where tax transparency is expected to be discussed.

In the French case, the Socialist government of François Hollande was deeply embarrassed by the revelations at a time of economic hardship for many citizens, and the French finance minister, Pierre Moscovici, led the calls for reforms at a hastily assembled news conference on Friday evening.

Taking leadership over the issue of tax havens “is very important for ensuring that citizens can trust the efficiency and fairness of our tax systems,” said Mr. Moscovici, who was flanked by Wolfgang Schäuble, the German finance minister, and George Osborne, Britain’s chancellor of the Exchequer, and by ministers from Poland, Spain and Italy.

The initiative should eventually cover “all kinds of revenues,” and would be similar to the American tax compliance act, Mr. Moscovici said.

One European tax haven, Luxembourg, bowed to such pressure on Wednesday and said it would begin forwarding the details of its foreign clients to their home governments.

Standing in the way is Austria, which has resisted agreeing to an automatic exchange of banking information between European Union countries.

Chancellor Werner Faymann of Austria recently suggested that talks were possible, and European officials said they expected Austria eventually would offer concessions. But the country’s finance minister, Maria Fekter, has showed no signs of backing down.

“We will fight for bank secrecy,” Ms. Fekter said on Saturday. “We are no tax haven,” she said. A day earlier she sought to portray Britain as one of the European Union’s biggest tax havens.

Mr. Osborne said at the news conference on Friday evening that he was pushing for more transparency from the Cayman Islands and British Virgin Islands.

“The places that you can hide are getting smaller and smaller and fewer and fewer,” Mr. Osborne said. “We are in advanced stages of discussions with them,” he said of talks with the two territories. “But I think they are in no doubt about what we expect of them,” he said.

More European countries are expected to join the campaign in coming weeks after Herman Van Rompuy, the president of the European Council, said on Friday that the bloc’s 27 leaders would discuss the issue at a summit meeting of leaders next month in Brussels.

David Jolly contributed reporting from Paris.

Article source: http://www.nytimes.com/2013/04/14/business/global/a-push-against-tax-havens-gains-support-in-europe.html?partner=rss&emc=rss