-“Britain’s proposed replacement for the EU withholding tax is causing more problems than the original. When Gordon Brown, the chancellor, announced he had devised a British solution to the problems dogging the European Union's savings tax package, it seemed a masterstroke. Less than two years on, it has turned out to be highly problematic.”
“Mr Brown's scheme - to replace the whole idea of a withholding tax with a system of information exchange - seemed to have dispatched all problems in one deft move. “
“The abandonment of Mr Monti's carefully constructed 'coexistence model' - in which information exchange ran alongside withholding taxes for countries preferring them - has upset Austria, Belgium and Luxembourg. Publicly, these countries agreed to a seven-year phase-out of their existing withholding taxes. Privately, they objected to the loss of banking confidentiality. “
“Attempts to harmonise European taxes have never been easy. But some lessons are beginning to emerge from the latest difficulties. First, it is better to debate the principles openly than to do so behind closed doors. Second, early work to establish a genuine consensus is more likely to succeed than arm-twisting to force through over-ambitious plans. Last, over-ambition on tax issues can damage relations with Britain's partners. “
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