28 November 2002

Commission report on negotiations on Savings Taxation Directive

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The European Commission has today presented a report on the progress to date of negotiations with non-EU countries on the taxation of interest from savings. As far as the US is concerned, the report notes that the US is an active proponent of information exchange and already exchanges information on a bilateral basis with many countries.

As far as the other five countries Switzerland, Liechtenstein, Monaco, Andorra and San Marino , are concerned, they have all proposed to apply withholding taxes as 'equivalent' measures. The Commission has tried to obtain commitments from these countries to a four-point plan which takes into account their firm opposition to automatic information exchange but which would allow agreement on genuine 'equivalent measures'.

This plan consists of a withholding tax, measures to encourage voluntary compliance, genuine information exchange on request and a review clause. At this stage the Commission considers that there is a basis for agreement on three of the four elements with Switzerland. The sticking point remains the exchange of information on request where it has not been possible to establish a clear satisfactory solution. Switzerland is the crucial player in this group of countries. The other four countries have not at this stage committed themselves to a substantial amount of detail in their proposals but could be reasonably expected to do so if an agreement was reached with Switzerland.

Mr Bolkestein will present the report to the EU's Council of Economics and Finance Ministers in Brussels on 3rd December. The Council should decide unanimously on a final text of the Directive no later than 31 December 2002. The decision should be made 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.

Report (provisional version)
Press release

© European Commission