Some rebates sent to wrong accounts
More rebate problems

Tax havens getting it from all sides

Is there no safe tax haven any more? Apparently not.

As I mentioned yesterday, the IRS is taking advantage of a 38-year-old law to crack down on U.S. income that's being stashed in foreign accounts.

Eu_flags_2 Now from across the pond comes word that the European Union  is considering taking a tougher stance on tax havens.

The sheltering of income from home country tax collectors has been a hot topic since February, when Germany cracked down on tax evaders in Liechtenstein, blogged about most recently here.

The concern quickly spread worldwide. Australia and New Zealand conducted raids and audits of wealthy residents. In the United States, a former banker for UBS, Switzerland's biggest bank, has been indicted on charges of helping a wealthy American real estate developer evade taxes on $200 million held in bank accounts in Switzerland and Liechtenstein.

And this week, the European Union on Wednesday agreed, at the urging of Germany, to consider a new clampdown on tax havens. The International Herald Tribune reports:

Speaking at a meeting of EU finance ministers on Wednesday, the EU commissioner responsible for taxation, Laszlo Kovacs, said he would propose an extension to the scope of the EU's directive on the taxation of savings, which applied primarily to bank accounts.

This could be done by expanding the list of products covered, perhaps to include trusts or foundations, or by applying the law to legal entities rather than just individuals, Kovacs said.

Just the beginning: Don't expect any resolution here to be quick or easy.

Although EU finance ministers set Sept. 30 deadline for the completion of an interim report on how effectively the current banking and bank secrecy rules have been implemented, that's only the beginning of the process.

Following the first draft, Kovacs said he would "present some concrete amendments on how to amend it."

And, according to the newspaper, the current directive on tax havens "took around 14 years of tortuous negotiation before it came into force in 2005."


Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.