The Crusade Against Tax Evasion
France and Germany join forces against tax fraud. France’s Minister of Economy and Finance, Pierre Moscovici, wants Europe to adopt rules facilitating the exchange of banking information. A report by BFM Business and the AFP.
On 7 April, Pierre Moscovici announced a “common position” with Germany on money laundering. The same weekend, Luxembourg pledged to relax its banking secrecy.
Paris and Europe seek to draw lessons from the Cahuzac case. On Sunday, April 7, Pierre Moscovici in an interview with Europe 1, wanted the EU to adopt a “Foreign account tax compliance act” (FATCA) similar to the one existing in the U.S., that would allow for “automatic exchange of information” on bank accounts held within the European Union.
The FATCA is a U.S. law passed in 2010, which aims to fight tax evasion. It requires foreign financial institutions to transmit to the IRS information about accounts held by U.S. taxpayers, such as the name and address of the account holder, or the amount of withdrawals.
A Common Position with Germany
In addition to this first initiative, Pierre Moscovici also said that “with my German colleague (Wolfgang Schäuble, Minister of Finance, ed), we will very quickly take a common position on the fight against money laundering.”
On Friday, April 5, Wolfgang Schäuble had already warned that his country would embark on a crusade against tax evasion. “We need to increase the pressure,” he declared on the radio Deutschlandfunk.
Luxembourg Will Reduce Banking Secrecy
The Franco-German offensive yielded already, at least indirectly, a first result: Luxembourg, a country where banking assets represent nearly 20 times GDP, will agree to reduce banking secrecy.
Sunday, April 7, Luxembourg Finance Minister Luc Frieden said in an interview with the German daily ‘Frankfurter Allgemeine Zeitung’ that “he was not directly opposed to the international trend of an automatic exchange of banking information.”
This is news that Wolfgang Schäuble welcomed in an interview to be published on April 9, in the ‘Saarbrücker Zeitung’: “I welcome every step that goes in the direction of automatic exchange of [banking] information”.
Thus far, Luxembourg had been, with Austria, the only country in the European Union to refuse, in the name of secrecy, to automatically transmit information on accounts of European residents on its soil when legal claims arose against said accounts.
However, for the time being, Vienna did not agree to change its policy of secrecy.