# CE2004065EN.01014801.xml

| 13.3.2004 | EN | Official Journal of the European Union | CE 65/148 |
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13.3.2004

EN

Official Journal of the European Union

CE 65/148

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(2004/C 65 E/164)

WRITTEN QUESTION E-2426/03

by Maurizio Turco (NI) to the Commission

(21 July 2003)

Subject:   Harmonisation of tax on the income from the savings of non-resident Union citizens and abolition of banking secrecy

Subject:

Knowing that:

| — | at the Feira summit on 19/20 June 2000 the EU finance ministers decided that as of 2011 the automatic exchange of information would be introduced for all Union countries in the interests of harmonising, at Community level, the tax on income from the savings of Union citizens; |
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at the Feira summit on 19/20 June 2000 the EU finance ministers decided that as of 2011 the automatic exchange of information would be introduced for all Union countries in the interests of harmonising, at Community level, the tax on income from the savings of Union citizens;

| — | on 21 January 2003 the EU finance ministers initialled a policy agreement, which is subject to acceptance of equivalent measures by other third countries and stipulates that:






  (a) | as of 1 January 2004 twelve Member States will initiate the automatic exchange of information; |
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on 21 January 2003 the EU finance ministers initialled a policy agreement, which is subject to acceptance of equivalent measures by other third countries and stipulates that:

(a)

as of 1 January 2004 twelve Member States will initiate the automatic exchange of information;

| (b) | Luxembourg, Austria and Belgium will initiate the automatic exchange of information ‘if and when’ the Council unanimously agrees that Switzerland, the United States, Liechtenstein, Andorra, San Maríno and Monaco accept the exchange of information on the basis of OECD's 2002 parameters, which define criminal and civil offences in the areas of taxation and fraud. |
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(b)

Luxembourg, Austria and Belgium will initiate the automatic exchange of information ‘if and when’ the Council unanimously agrees that Switzerland, the United States, Liechtenstein, Andorra, San Maríno and Monaco accept the exchange of information on the basis of OECD's 2002 parameters, which define criminal and civil offences in the areas of taxation and fraud.

| — | on 3 June 2003 the EU finance ministers approved an arrangement negotiated with Switzerland. |
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on 3 June 2003 the EU finance ministers approved an arrangement negotiated with Switzerland.

Can the Commission answer the following questions:

| 1. | Why do the third countries do not include the Vatican State, despite the fact that:






  (a) | the central bank, the Istituto Opere di Religione (IOR) does not belong to any international monitoring body; |
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1.

Why do the third countries do not include the Vatican State, despite the fact that:

(a)

the central bank, the Istituto Opere di Religione (IOR) does not belong to any international monitoring body;

| (b) | the IOR takes part indirectly in the payment systems of the euro zone — with dual access via two major banks, one of them German, the other Italian, which are themselves linked to the system — thereby evading surveillance by the banking authorities to which only direct participants are subjected; |
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(b)

the IOR takes part indirectly in the payment systems of the euro zone — with dual access via two major banks, one of them German, the other Italian, which are themselves linked to the system — thereby evading surveillance by the banking authorities to which only direct participants are subjected;

| (c) | it has no legislation to combat money-laundering; |
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(c)

it has no legislation to combat money-laundering;

| (d) | it has not accepted the exchange of information on the basis of the 2002 OECD parameters, which define criminal and civil offences in the areas of taxation and fraud; |
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(d)

it has not accepted the exchange of information on the basis of the 2002 OECD parameters, which define criminal and civil offences in the areas of taxation and fraud;

| (e) | it has on several occasions been involved in financial transactions with serious implications, which have never been the subject of legal proceedings because of the concordat with the Italian Republic guaranteeing the Catholic hierarchy absolute impunity? |
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(e)

it has on several occasions been involved in financial transactions with serious implications, which have never been the subject of legal proceedings because of the concordat with the Italian Republic guaranteeing the Catholic hierarchy absolute impunity?

| 2. | What arrangements will apply in overseas territories, in particular British ones, and, apart from Switzerland, which has signed a negotiated solution, what are the current positions of the United States, Liechtenstein, Andorra, San Maríno and Monaco on the exchange of information on the basis of the 2002 OECD parameters? |
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2.

What arrangements will apply in overseas territories, in particular British ones, and, apart from Switzerland, which has signed a negotiated solution, what are the current positions of the United States, Liechtenstein, Andorra, San Maríno and Monaco on the exchange of information on the basis of the 2002 OECD parameters?

| 3. | Can the Commission give an assurance that in Luxembourg, Austria and Belgium banking secrecy will be maintained at least until 2011, and say under what conditions it might remain in force even after that date? |
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3.

Can the Commission give an assurance that in Luxembourg, Austria and Belgium banking secrecy will be maintained at least until 2011, and say under what conditions it might remain in force even after that date?

Answer given by Mr Bolkestein on behalf of the Commission

(5 September 2003)

(5 September 2003)

| 1. | I would draw the Honourable Member's attention to the fact that the final text of Council Directive 2003/48/EC on taxation of savings income in the form of interest payments, adopted by the Council on 3 June 2003, was published in the Official Journal of the European Union in all the Community languages on 26 June 2003 (1). If he examines the text, the Honourable Member will find it confirms that the purpose of the Directive is to enable tax to be levied on interest payments made to individuals alone.
  To ensure that European financial markets stayed competitive, in the margins of the European Council in Feira in June 2000 the Finance Ministers of the Member States agreed on a list of third countries and dependent or associated territories in whose territory, because of the existing or potential volume of interest payments made to individuals, it would be desirable for the Community to obtain the introduction of equivalent or identical measures to those of the newly-adopted Directive.
  The Vatican City State does not figure in the list drafted by the Council, and it is therefore up to the Council to explain its reasons to the Honourable Member if he should require them. The Commission can only note that the current role of the Vatican's financial system in the payment of interest to individuals does not appear to threaten the competitiveness of European financial markets. |
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1.

I would draw the Honourable Member's attention to the fact that the final text of Council Directive 2003/48/EC on taxation of savings income in the form of interest payments, adopted by the Council on 3 June 2003, was published in the Official Journal of the European Union in all the Community languages on 26 June 2003 (1). If he examines the text, the Honourable Member will find it confirms that the purpose of the Directive is to enable tax to be levied on interest payments made to individuals alone.

Official Journal of the European Union

1

To ensure that European financial markets stayed competitive, in the margins of the European Council in Feira in June 2000 the Finance Ministers of the Member States agreed on a list of third countries and dependent or associated territories in whose territory, because of the existing or potential volume of interest payments made to individuals, it would be desirable for the Community to obtain the introduction of equivalent or identical measures to those of the newly-adopted Directive.

The Vatican City State does not figure in the list drafted by the Council, and it is therefore up to the Council to explain its reasons to the Honourable Member if he should require them. The Commission can only note that the current role of the Vatican's financial system in the payment of interest to individuals does not appear to threaten the competitiveness of European financial markets.

| 2. | The Honourable Member's question refers to the conclusions adopted by the Council on 21 January 2003. The last subparagraph of point 6 states that ‘The Council assesses that sufficient reassurances have been obtained with regard to the application of the same measures applying the same procedures as the 12 Member States or as Austria, Belgium and Luxembourg, in all relevant dependent or associated territories (the Channel Islands, Isle of Man, and the dependent or associated territories in the Caribbean)’. Those territories must therefore either participate in the automatic exchange of information with the Member States or apply a withholding tax with revenue sharing in the same way as Belgium, Luxembourg and Austria. In the statements accompanying the adoption of the Directive on 3 June 2003 the Council asked the Netherlands and the United Kingdom, subject to their constitutional powers, to ensure that the dependent or associated territories in question applied the measures from the date of implementation of the Directive on 1 January 2005, ‘it being understood that, if and when Austria, Belgium and Luxembourg will implement automatic exchange of information, any territory applying the withholding tax will also implement automatic exchange of information from the same date as those Member States.’
  While all the Member States are also members of the Organisation for Cooperation and Economic Development (OECD), the Commission cannot reply on behalf of the OECD to the Honourable Member.
  The Commission wishes only to note that:






  — | the United States, a member of the OECD, is committed to the exchange of tax information as a means of combating fraud and tax evasion; |
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2.

The Honourable Member's question refers to the conclusions adopted by the Council on 21 January 2003. The last subparagraph of point 6 states that ‘The Council assesses that sufficient reassurances have been obtained with regard to the application of the same measures applying the same procedures as the 12 Member States or as Austria, Belgium and Luxembourg, in all relevant dependent or associated territories (the Channel Islands, Isle of Man, and the dependent or associated territories in the Caribbean)’. Those territories must therefore either participate in the automatic exchange of information with the Member States or apply a withholding tax with revenue sharing in the same way as Belgium, Luxembourg and Austria. In the statements accompanying the adoption of the Directive on 3 June 2003 the Council asked the Netherlands and the United Kingdom, subject to their constitutional powers, to ensure that the dependent or associated territories in question applied the measures from the date of implementation of the Directive on 1 January 2005, ‘it being understood that, if and when Austria, Belgium and Luxembourg will implement automatic exchange of information, any territory applying the withholding tax will also implement automatic exchange of information from the same date as those Member States.’

While all the Member States are also members of the Organisation for Cooperation and Economic Development (OECD), the Commission cannot reply on behalf of the OECD to the Honourable Member.

The Commission wishes only to note that:

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the United States, a member of the OECD, is committed to the exchange of tax information as a means of combating fraud and tax evasion;

| — | San Maríno gave undertakings to the OECD on 4 April 2000, in an ‘advance commitment letter’, so that it was not included in the OECD's list of uncooperative tax havens; |
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San Maríno gave undertakings to the OECD on 4 April 2000, in an ‘advance commitment letter’, so that it was not included in the OECD's list of uncooperative tax havens;

| — | by contrast, the Principalities of Andorra, Liechtenstein and Monaco are still on the list, which also includes the Marshall Islands, Liberia and Nauru. |
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by contrast, the Principalities of Andorra, Liechtenstein and Monaco are still on the list, which also includes the Marshall Islands, Liberia and Nauru.

| 3. | Article 10 of the final text of Council Directive 2003/48/EC on the taxation of savings income in the form of interest payments only lays down the starting date of the transitional period in which Belgium, Luxembourg and Austria will not be required to apply the provisions on the automatic exchange of information between tax administrations. As is clear from Article 10(2), the duration of the transitional period is no longer set in advance, as it depends on the date on which Switzerland, Liechtenstein, San Maríno, Monaco and Andorra undertake to exchange information with all the Member States upon request, as defined in the OECD Model Agreement of April 2002 (confirmation of the same undertaking should also relate to the United States).
  The final text of the Directive therefore does not provide any guarantee as to how long the restrictions on access to banking information for tax purposes which still apply in Belgium, Luxembourg and Austria will be maintained. The last sentence of Article 10(3) even offers any of the three Member States the option of electing to lift the restrictions before the end of the transitional period and participating fully in the system of automatic exchange of information with all the Member States, no longer having to apply the withholding tax. |
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3.

Article 10 of the final text of Council Directive 2003/48/EC on the taxation of savings income in the form of interest payments only lays down the starting date of the transitional period in which Belgium, Luxembourg and Austria will not be required to apply the provisions on the automatic exchange of information between tax administrations. As is clear from Article 10(2), the duration of the transitional period is no longer set in advance, as it depends on the date on which Switzerland, Liechtenstein, San Maríno, Monaco and Andorra undertake to exchange information with all the Member States upon request, as defined in the OECD Model Agreement of April 2002 (confirmation of the same undertaking should also relate to the United States).

The final text of the Directive therefore does not provide any guarantee as to how long the restrictions on access to banking information for tax purposes which still apply in Belgium, Luxembourg and Austria will be maintained. The last sentence of Article 10(3) even offers any of the three Member States the option of electing to lift the restrictions before the end of the transitional period and participating fully in the system of automatic exchange of information with all the Member States, no longer having to apply the withholding tax.

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(1)  OJ L 157, 26.6.2003.

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