EU tackles loopholes in tax rules, tax evasion

EU
regulators announced proposals yesterday designed to close off loopholes in its
strict savings tax rules and to crack down on tax evasion linked to cross-border
investments, preventing EU investors from hiding millions of euros in
Liechtenstein.

Although non-EU countries like Liechtenstein and Switzerland signed up to the
EU’s savings tax rules in 2005, those rules only cover interest on bank accounts
held outside a home state, the Guardian reports.

The current scope of the EU savings tax directive needed to be extended to
help Europe in its battle to stamp out tax evasion, Laszlo Kovacs, EU Tax
Commissioner, said in a press conference.

The new proposal requires paying agents to apply the rules to payments of
interest to structures outside the EU, and widens the rules to payments of
interest to certain trusts and foundations. It also proposes extending the scope
of the rules to cover certain life insurance contracts.

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the Guardian story