Monday March 3, 06:58 PM
Germany expects EU support in tax fraud clampdown: finance minister
BRUSSELS (AFP) - German Finance Minister Peer Steinbrueck said Monday he expected the support of EU colleagues in cracking down on tax fraud amid an escalating standoff with Liechtenstein.
"I'm expecting broad European support in the struggle against tax fraud, which weakens the whole community," he told journalists as he arrived for a meeting with colleagues from the 15 nations sharing the euro.
He said that in particular the European Union could broaden the scope of its existing savings directive and bilateral tax accords.
With Berlin and Liechtenstein mired in a tax fraud scandal, Germany's no-nonsense finance minister had previously said he wanted to shine the spotlight on murky tax havens when EU finance ministers meet in Brussels on Tuesday.
Currently, the savings tax directive, which took effect in 2005, requires EU states to share tax information on interest income that citizens earn on accounts in other member states.
There is a special arrangement for Austria, Belgium and Luxembourg, which instead charge account-holders from other EU countries a witholding tax. Liechtenstein and Switzerland are covered by similar treaties with the EU requiring a witholding tax.
Steinbrueck said that although Luxembourg and Austria were not tax havens, "it is difficult to get certain information from Luxembourg as well as Austria."
The savings directive allows considerable scope for tax dodgers to set up foundations in order to get around the rules, which also do not cover dividend income or capital gains.
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