European Union leaders in the coming week will pledge to step up efforts to fight tax evasion and conclude work by year end on an updated savings-tax pact that covers how countries share data, according to draft conclusions for their May 22 summit.
The EU leaders’ commitment comes after finance ministers failed to reach a deal on the savings pact last week because of reservations voiced by Luxembourg and Austria. The leaders also will endorse efforts to expand tax information-sharing worldwide, as sought by the U.K., France and other nations, according to the draft, dated May 17.
“Priority will be given to efforts to extend the automatic exchange of information at the EU and global levels,” according to the draft conclusions. The draft also notes “consensus on the scope” of the updated savings tax accord and calls for its adoption “before the end of the year.”
The EU savings-tax accord sets standards for how countries can collect information on income from savings that their residents earn in other nations. The updated accord aims to close loopholes in the previous pact by including savings income from trusts, foundations, funds and other financial products.
The update also requires all EU members to take part in information exchanges after a transition period. The original accord, passed in 2005, offered Austria and Luxembourg an exemption from automatic information exchange requirements, and those nations now have agreed to revise their policies.
Current sticking points involve the timing of when the updated accord would take effect. EU finance ministers on May 14 approved the start of anti-tax-evasion talks with Switzerland and four other countries, and Luxembourg Prime Minister Jean-Claude Juncker said this week that those talks must conclude before the EU approves the new savings pact.
In addition to the anti-evasion commitments, EU nations also will call for renewed attention to “the supply of affordable and sustainable energy” and its effect on EU economies. Leaders will pledge to study energy prices, revisit state aid rules for energy investments and investigate ways to boost financing for energy-efficient projects, according to the draft.
“In the current economic context we must mobilize all our policies in support of competitiveness, jobs and growth,” the draft conclusions say.
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