Thursday, November 15, 2012

Luxembourg, Austria, Switzerland play spoilers on transparency again

We've written plenty about the complex chess game in Europe whereby Switzerland signs its peculiar, loophole-riddled and ultimately useless bilateral tax deals with a select few European countries, and then Luxembourg and Austria cry 'it's not fair' that these select few countries get special treatment from Switzerland - then say they won't allow Europe's transparency agenda (through the Savings Tax Directive) to move forwards. Well, they've done it again. From Europolitics:
"The 27 Finance Ministers proved incapable once again of working out even a partial compromise on savings taxation, on 13 November. Luxembourg and Austria still refuse to give the green light to the start of new negotiations with Switzerland."
We have called Luxembourg the "Death Star" of financial secrecy inside the European Union, and this reminds us how apt it is. EU Tax Commissioner is not happy about these countries' behaviour, and he shouldn't be:
"(EU) Taxation Commissioner Algirdas Semeta lambasted Luxembourg and Vienna in advance: "I cannot understand that anyone would make even more difficult the consolidation efforts by Greece, Ireland, Italy, Portugal and Spain and many other member states by holding up this issue," he declared. "It is just, necessary and urgent to make progress."
. . .
The Grand Duchy [of Luxembourg], which fears capital flight, is now officially demanding to be placed on the same footing as Bern."
Indeed. Semeta's statement is here, and he went on to say
"No one can understand this delay.

We are not talking of a major EU initiative here. We are talking about giving the Commission a chance to discuss ways to improve the fight against tax fraud and evasion with international partners.

Agreeing to launch negotiations does not in any way pre-empt the end result of these talks.

I have already, many times, reassured Austria and Luxembourg that they can oppose the outcome of the negotiations if they consider it to go against their interests. They should have no concerns about that.

Second, I fail to understand the arguments which are being used to oppose progress.

If some Member States want to maintain bank secrecy domestically, for their own residents, that's their choice. Our discussions do not put this into question.

But this argument doesn’t fly when it comes to taxing non-residents."
Semeta is absolutely right. Make no bones about it: this EU initiative is being opposed by criminal interests who want to preserve their right to facilitate, support and profit from tax evasion and many other kinds of crimes that their secretive tax haven centres harbour.

Hopefully, Germany will reject the Swiss deal soon, and then we can shrink the corrupt Swiss Rubik project down to the size where it is small enough to drown in a bathtub.


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