July 11, 2020

Support Grows for European Effort to Fight Tax Havens

Miroslav Kalousek, the Czech finance minister, pledged to join the push for more automatic exchanges of bank records that already had the backing of Britain, France, Germany, Italy and Spain, a spokesman for the Czech representation to the European Union said Sunday.

The spokesman said the Czech minister made his overture on Saturday during a two-day meeting of European finance ministers where Poland, followed by Belgium, the Netherlands and Romania, also signed up, bringing the number of countries supporting the initiative to 10. The campaign is being strongly backed by the French finance minister, Pierre Moscovici.

For France, the issue has taken on greater urgency since Jérôme Cahuzac resigned as budget minister after acknowledging he had foreign holdings in Switzerland that he had previously denied.

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

“The tools are already on the table, waiting to be seized,” Mr. Semeta said, 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 set an earlier date — it is currently foreseen as 2017 — for 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 on 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 that Mr. Cahuzac had foreign holdings at a time of economic hardship for many citizens, and Mr. Moscovici led the calls for reforms at a hastily assembled news conference on Friday evening.

Taking leadership on the issue of tax havens “is very important for ensuring that citizens can trust the efficiency and fairness of our tax systems,” Mr. Moscovici said, 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 E.U. countries.

Chancellor Werner Faymann of Austria recently suggested that talks were possible, and European officials said they thought that 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 Union’s biggest tax havens.

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

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.

Article source: http://www.nytimes.com/2013/04/15/business/global/support-grows-for-european-effort-to-fight-tax-havens.html?partner=rss&emc=rss

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