§ Mr. RedwoodTo ask the Chancellor of the Exchequer (1) what the UK Government's policy is on EU policy towards withholding taxes; and which EU countries are introducing a withholding tax on savings income; [105927]
(2) which (a) EU countries and (b) offshore investment centres under the British Crown are introducing exchange of information concerning investment income. [105922]
§ Dawn PrimaroloHM Government supports exchange of information as the best means of combating cross-border tax evasion on savings income.
At ECOFIN on 21 January 2003, the EU reaffirmed its ultimate objective of exchange of information, on as wide a basis as possible, in respect of savings income. Political agreement was reached that all 15 member states would move to a system of automatic exchange of information, with a transitional period for Austria, Belgium and Luxembourg. During this transitional period, it was agreed that these three member states would operate a withholding tax, rising to 35 per cent., on non-resident savings income.
EU member states assessed on 21 January that sufficient reassurances had been received that all the UK territories listed in the ECOFIN conclusions of 20 June 2000 at Santa Maria da Feira will implement the same measures as EU member states.
Under the OECD's initiative on harmful tax competition, Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Guernsey, Isle of Man, Jersey, Montserrat and Turks and Caicos Islands have all made commitments to exchange of information on request in respect of direct tax matters.