EU member states have agreed to amend the Savings Tax Directive to include trusts and foundations and to cover investment income equivalent to interest in an effort to end banking secrecy once and for all.
The Directive, which came into operation in July 2005, requires banks in each EU member country to report cross-border interest payments to the government of the destination country or, in the case of Luxembourg and Austria, to impose a withholding tax instead. It is understood that the EU's automatic reporting agreements with Switzerland and the other four non-EU countries will be amended in parallel with the new Directive.
The amended Directive is now expected to be adopted this week, and transposed into Member States' national laws over the next two years.
