Cross-border tax evasion has prompted European Union regulators to propose tightening the bloc’s tax rules.
Banks and other institutions since 2005 have been required to report to authorities the interest income which they pay to account holders who live in other EU countries.
Or, they can levy a withholding tax on the interest income.
The new proposal requires paying agents to apply the rules to payments of interest to structures outside the EU as well as inside the EU.
But some countries, both EU and non-EU, are especially reluctant to disclose sensitive information.
EU Tax Commissioner Laszlo Kovacs:
“There are three member states: Luxembourg, Belgium and Austria, who insisted on the withholding tax option and we have no complaints and we did not want to start discussions on the withholding tax option versus the exchange of information option.”
Kovacs said EU finance ministers would hold an initial discussion of his proposal at their next meeting on Dec. 2.
The proposals would need unanimous backing from all 27 EU members to enter force, as in all EU tax matters.