Top EU official backs better information exchange
We will highlight a couple of things he said (and note that he was speaking in an official capacity, it seems.) Like Tremonti, he gives short shrift to those who think a witholding tax regime alone is good enough. Proper information exchange, he says, is the thing to aim for.
"Automatic exchange of information permits tax authorities to obtain information on their own tax residents in cases where they might not otherwise be aware of such cross-border investments.And as for the OECD's forms of information exchange - they just aren't good enough. So much for the OECD's claim that theirs are the universally accepted international standard.
It is much more interesting for a tax authority to receive comprehensive information about the assets owned by its residents abroad than to receive only a withholding tax on the income produced by such assets. Such a withholding tax may generate some revenue, but it does not allow Member States to assess the overall tax base of their residents. As a consequence, the progressivity of some tax scheme cannot properly be applied. This leads to less revenue and the unequal treatment of taxpayers."
Undoubtedly, the OECD standards of transparency and exchange of information have paved the way for international consensus on the importance of effective exchange of information for collecting taxes. But as you may know, the OECD standards, which prevent States from invoking bank secrecy to refuse access to information, concerns exchange of information on request. This approach only works if the State that needs the information already has indications that a tax resident may have financial interests in another State.Quite so. Well said. It's the OECD's Catch-22 approach. And then, back to the UK's and Germany's deeply flawed deals:
In this context, a distinction must be made between our closest neighbours and other international partners. Our European neighbours are closely associated to all our policies, through the EFTA and EEA agreements and, particularly in the case of Switzerland, also through a series of bilateral EU agreements. As a result, our respective markets are closely integrated and cross-border trade and investment are intense.He is quite right. Fantastic to see influential people speaking truth to power.
It is therefore only logical that we have higher expectations for these countries, and that we expect them to cooperate more closely with the EU on the exchange of information. In this context, it is not sufficient that individual EU Member States conclude bilateral agreements with third countries which provide for the OECD standards of transparency and exchange of information.