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Luxembourg Softens Stance On Revised Savings Directive

by Ulrika Lomas, Lowtax.net, Brussels
11 February, 2014

During a news conference in Berlin with German Chancellor Angela Merkel, Luxembourg's Prime Minister Xavier Bettel underscored that the Grand Duchy does not intend to block the planned revision of the European Union (EU) Savings Tax Directive, while making clear that there are certain provisos.

Significantly softening the country's stance, Prime Minister Bettel insisted that Luxembourg is not awaiting the conclusion of talks between the European Commission and third countries, such as Switzerland, although it does aim to see concrete steps emerging from those discussions, for example an agreement to apply equivalent rules.

It is vital that negotiations are proceeding "in the right direction," Bettel explained, warning that it is simply not enough to state that the dialogue is going well. Here, the Luxembourg Prime Minister reiterated that the Grand Duchy intends to await the European Commission's report on negotiations with third countries, before giving its go-ahead to the planned revisions.

Luxembourg will not use Switzerland "as an excuse," nor will it block expansion of the EU Directive "for the sake of having a blockade," Prime Minister Bettel emphasized. Bettel explained that the Luxembourg Government is due to hold talks with Austria shortly to discuss the matter.

Welcoming the latest signals from Luxembourg, German Chancellor Angela Merkel underlined that negotiations with Switzerland are also in Germany's interests. Germany does not just want to resolve the issue of the taxation of capital gains with Luxembourg and Austria, but aims to ensure that the same principles apply in Europe, to create a level playing field, she added. It would be counterproductive to put in place a system with rules that are not applied in other countries in Europe, Merkel ended.

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