EU tax evasion bank data agreement said to be close

There are reportedly about to be major moves in the fight against tax evasion within the European Union.

The region’s finance ministers are said to be close to an agreement on automatic sharing of bank data so that the authorities could spot tax dodging or illicit money flows more easily.

Diplomatic sources told Reuters there could be an announcement next week.

Under the agreement if someone living in one EU country opens a bank account in another EU member state, the tax office in that person’s country of origin will automatically be informed.

It is due to come into force in 2017, though Luxembourg and Austria would likely be given more time to comply.

The European Commission wants all 28 EU member states to strengthen rules on how income on savings in bank accounts is taxed, including an automatic exchange of information about which account holders receive what interest payments.

Most EU members already have such an exchange under rules known as the EU Savings Directive, but Luxembourg and Austria have not wanted to give the names of account holders to other countries, and instead get the banks to apply a withholding tax.

Most developed countries already share information on taxpayers and depositors “on demand”. Since this requires the authorities in the requesting jurisdiction to suspect wrongdoing it only has limited impact in uncovering illegal behaviour.

This week the Swiss government also said it was ready to start talks with other countries on the automatic exchange of bank account details.