Luxembourg has called on the European Commission (EC) to accelerate negotiations with third party countries, to make sure that progress is made on plans to modify the Savings Tax Directive.
The Savings Tax Directive is designed to ensure that income from savings is appropriately taxed within the EU. This is done by measures to exchange information between member states on the savings income arising to residents of other member states. A many EU residents hold savings in non-EU countries such as Switzerland the EU has taken steps to sign agreements to ensure that income of EU residents in these countries is also taxed.
Luxembourg and some other EU countries are concerned about the possibility of savings being diverted away from institutions within their borders and instead being deposited with financial institutions in non-EU countries. They therefore want to achieve a level playing field between EU and certain non-EU countries with regard to the reporting of savings income.
The Finance Ministry indicated that since April of 2013 and Luxembourg has taken some concrete steps that illustrating its determination to make progress. Its decision to implement like its partners of European Union, the “automatic exchange of information” on interest payments from 2015. Additionally, Luxembourg has made a pledge to promoting the automatic exchange as a international standard by the signature of the Organization for Economic Co-operation and Development Multilateral Convention in May 2013. Finally, Luxembourg has made a pledge to ensuring a level playing field, by requesting the adoption of the new extent of the taxation of income from savings Directive be related to the introduction of equivalent measures in the third party countries, and in particular, in Switzerland.