Finance ministers try to break impasse

The UK – fearing the damage it could have on the City’s lucrative eurobonds market – opposed plans for a controversial minimum withholding tax on non-resident savings.

In February, British representatives suggested a system of automatic information exchanges as an alternative, involving routine disclosure of information from payers of interest to their domestic tax authority, which would be passed on to other tax authorities.

But four EU nations, led by today’s hosts Luxembourg, opposed the plan.

The Portuguese presidency of the European Commission has put forward a compromise solution that member states can either introduce the tax or exchange information in the manner suggested by the UK.

Few, however, expect the meeting will result in any lessening in tension over the issue. One European diplomat told the BBC that he put chances of success at ‘20% at best’.

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