May
15
European Union considers review offensive tax havens rules
Filed Under Offshore News Tags: European Commission, European Union, Offshore, offshore trust foundation, tax commissioner —
European Union agrees to review tax haven rules
OffshoreBank.com (report by: David Nepo)
The European Commission is ready to begin a lengthy process to expand current laws to prevent tax evasion on offshore savings interest. The EU caved into pressure from Germany yesterday (May 14, 2008) and agreed to consider a sudden restriction on an activity on tax havens – despite opposition from Luxembourg which said the Union commission saw no reason to change current laws. The European Commission is set to begin a lengthy process to expand current laws to prevent its citizens evading tax on the interest accumulated on offshore savings.
Laszlo Kovacs the european Union tax commissioner yesterday proposed an extension to the scope of savings in bank accounts. Kovacs said this would be done by including trusts or foundations to the list of products already covered by existing laws. The Commission will propose the expansion of a directive that aims to ensure that EU citizens do not evade taxes on the interest from savings by opening offshore accounts abroad.Speaking at a meeting of EU finance ministers Laszlo on Wednesday, the EU commissioner responsible for taxation, Laszlo Kovacs, said he would propose an extension to the scope of the EU’s directive on the taxation of savings, which applied primarily to offshore bank accounts.
Tax havens came under wide scrutiny of authorities in Europe afterGermany cracked down on evaders in Liechtenstein. Germany then lobbied for EU ministers to speed up planned reviews of the tax laws relating to offshore savings.The concern spread abroad, leading authorities in Australia and Germany to carry out audits and raids on their wealthiest residents.
Luxembourg, which defends banking secrecy, underlined its position yesterday. Finance minister Luc Frieden said he saw no loopholes in the current rules. He added that any changes ‘would certainly need a lot of time’.
Tax havens have been in the spotlight since February, when Germany cracked down on tax evaders in Liechtenstein. Germany persuaded European Union finance ministers to speed a planned review of the savings legislation after revelations of tax evasion. After that concern has spread, with the tax authorities in Australia and New Zealand carrying out raids and audits on wealthy residents.
Most recently, on Tuesday, the authorities in the United States indicted a former banker for UBS, Switzerland’s biggest bank, on charges of helping a wealthy American real estate developer evade taxes on $200 million held in bank accounts in Switzerland and Liechtenstein.
On Wednesday Germany’s finance minister, Peer Steinbrück, highlighted the way in which investment foundations circumvent the current EU savings tax directive, which applies only to individuals. “They are founded to cheat the tax authority,” he said.
The European Union law operates in 42 jurisdictions, the 27 EU nations plus San Marino, Monaco, Switzerland, Liechtenstein and Andorra as well as 10 former British and Dutch colonies.
Luxembourg has a developed an important financial center and which defends banking secrecy, underlined its opposition. the treasury minister Luc Frieden, said no loopholes in the current rules. Any changes “would certainly need a lot of time,”.
