April 8 (Bloomberg) -- Austria may find itself isolated if it continues to resist European Union savings-tax proposals, EU Tax Commissioner Algirdas Semeta said.
Semeta said Luxembourg is loosening its opposition to automatic exchange of information, citing comments from that nation’s Finance Minister Luc Frieden to Frankfurter Allgemeine Zeitung. The tax chief said this “long-overdue” shift paves the way to move ahead on the EU negotiations, which have been stalled since last year.
“The spotlight is now on Austria,” Semeta said in a statement. “If it continues to resist this inevitable progress towards greater transparency, it will find itself in a lonely and quite unsustainable position.”
Luxembourg and Austria last year vetoed negotiations over the extension of a savings tax because of concerns that they would be forced to give up banking secrecy measures that attract foreign depositors. The two countries blocked the European Union from starting talks on updating the seven-year-old tax accord with Switzerland, Liechtenstein, Monaco, Andorra and San Marino.
Austrian Finance Minister Maria Fekter said April 5 that her country’s opposition hasn’t changed. “I’m not interested in an automated information exchange that creates a data graveyard of sorts,” Fekter told reporters in Brussels.
Under a 2005 accord, Austria and Luxembourg withhold tax on interest income paid to depositors from other EU states while protecting their identities. Other EU states transfer the income data to the depositor’s home tax authority.
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