-ECOFIN Ministers could not agree on imposing sanctions on Switzerland if negotiations on the Taxation of Savings Income Directive are not concluded satisfactorily before the end of the year. Luxembourg and Austria opposed such a strong move which is being advocated by the United Kingdom, Finland and Sweden. Possible sanctions envisaged against Switzerland may also include a ban on certain operations by Swiss banks within the EU.
Commissioner Bolkestein believes the introduction of a scheme for the ‘automatic’ exchange of information with Switzerland ”is not part of his mandate“, but emphasises that he is bound rather to negotiate ”equivalent measures“ with Switzerland and other third countries. Negotiations should focus on four options:
scope for taxation at source at a rate to be determined at some later date;
exchange of information on request;
voluntary exchange of information where approved by EU citizens investing funds in Switzerland;
a review clause following a seven year transition period.
Under the proposed Directive, each Member State would ultimately be expected to provide information to other Member States on interest paid from that Member State to individual savers resident in those other Member States. For a transitional period of seven years, Belgium, Luxembourg and Austria would apply a withholding tax instead of providing information, at a rate of 15% for the first three years and 20% for the remainder of the period.
Under the timetables established at Feira and by the Council in July 2001, the Council should decide unanimously on a final text of the Directive no later than 31 December 2002, on the basis of a report presenting the outcome of the negotiations with the third countries and of the discussions of the United Kingdom and the Netherlands with their dependent and associated territories concerning the adoption of the same measures in those territories.
© Council of the European Union
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