All EU nations agree plan to combat tax evasion

All 28 EU member states have now signed up to an agreement to combat tax evasion after Austria and Luxembourg dropped their objections to a plan first mooted in 2008, officials said Thursday.

There “is a green light” from Luxembourg, Prime Minister Xavier Bettel said.

Luxembourg, an important financial centre, “has been advancing towards becoming a transparent banking” system, Bettel told a briefing.

“We confirmed today that this is the course we want to follow,” he added.

Officials said Austria had also indicated it would now come on board.

The EU savings tax directive requires banks to automatically exchange account information with authorities in other countries to ensure that they can track and tax money no matter where it is held.

To come into effect, the directive needed the support of all 28 European Union member states.

Austria and Luxembourg had jealously guarded their financial services industries, but came under attack as the 2008 global crash morphed into the European debt crisis.

Bailouts for the banks hit in the crisis went down badly with taxpayers, who blamed them for causing many of the problems in the first place through reckless risk-taking, driving demands for reform.

Austria and Luxembourg argued that they would only agree if the EU made enough progress with other international financial centres, including Switzerland, to ensure they respected the new rules too.