The Grand Duchy’s prime minster Jean-Claude Juncker told Luxembourg’s parliament today in a state of the nation address:
"If today we change our position, it is not because of European pressure, although 25 countries are strongly in favour of the automatic exchange of information, but because the Americans do not leave us a choice. If we refuse to do so, there will be more financial business with the United States, which is inconceivable for an international financial center such as Luxembourg. "
"To this end, it was a good choice of the Luxembourg financial center to focus on a strategy of white money. The financial sector saw no black money or tax evasion.This is why we can safely apply the automatic exchange of information from 1 January 2015."
The plans revealed in the statement bring Luxembourg in line with all the EU member nations except Austria, whose chancellor is reported to have said it would join talks on the subject.
The UK Government only yesterday announced that it is to develop and pilot a new “multilateral tax information exchange agreement” with four of its largest EU fellow members.
International Adviser also reported an earlier statement that the Grand Duchy would consider greater banking transparency.
In his statement, Juncker emphasised that “the United States – not the Europeans, not the Germans – have passed a bill (FATCA) which requires all countries with which they make financial business practice automatic exchange of information.
“The withholding tax, which had long been the preference of Luxembourg, was not imposed on the international scene. It is perhaps unfortunate, because the withholding tax would have generated more revenue than the complicated system of exchange of information, but it is now a de facto situation created by the American radical position.”
To read the full statement by Jean-Claude Juncker, click here.