Savings Income (Hansard, 31 July 1998)

§ Mr. Whittingdale
To ask the Chancellor of the Exchequer what is the Government's policy on the proposed withholding tax on savings income of residents of other EU member states. [54698]

§ Dawn Primarolo
The Government are in principle in favour of effective international action to tackle tax evasion. But the Government would need to be satisfied that any proposals would not do serious damage to financial markets.

§ Mr. Whittingdale
To ask the Chancellor of the Exchequer what discussions he has had with other European Finance Ministers about the proposed imposition of a withholding tax on savings income of residents of other EU member states. [54699]

§ Dawn Primarolo
Last December's meeting of Finance Ministers at ECOFIN invited the Commission to produce a draft directive on this subject. The draft has now been published and is being considered and discussed.

§ Mr. Whittingdale
To ask the Chancellor of the Exchequer what assessment he has made of the impact on the UK financial services industry of the imposition of a withholding tax on the savings income of residents of other EU member states. [54700]

§ Dawn Primarolo
The Draft Directive would involve some compliance costs for payers who would have to withhold tax and/or provide information. The Government are concerned about its possible impact on the financial markets. It is holding discussions with interested parties and will publish a fuller assessment in the light of these.