Michael Bell
Question:32 Mr. Bell asked the Minister for Finance if he will make a statement on the outcome of the discussions at the EU summit in Feira, Portugal regarding the proposed savings directive. [18153/00]
Written Answers. - EU Summit.
Michael Noonan
Question:65 Mr. Noonan asked the Minister for Finance if he will state Ireland's position with regard to the EU tax evasion directive; if he has committed the Government to agreement on the co-existence compromise; and if he will make a statement on the matter. [18098/00]
I propose to take Questions Nos. 32 and 65 together.
Following a number of meetings of both the ECOFIN Council and the European Council in Feira on 18 to 20 June 2000, an agreement was reached on how to progress matters in relation to the draft savings directive. It has been agreed that, as set out in the Helsinki European Council Conclusions, all citizens resident in a member state should pay the tax due on all their savings income and that in order to achieve that outcome, exchange of information on as wide a basis as possible shall be the ultimate objective of the EU in line with international developments.
In the immediate future, all member states have committed to achieving agreement during the French Presidency, which runs for six months from July, on the substantial content of the directive. During 2001 and 2002 the issue of the adoption of equivalent measures by the US and key third countries will be pursued by the Presidency and the Commission and member states will promote the adoption of the same measures in all relevant dependent or associated territories.
Once sufficient reassurances with regard to the application of the same measures in dependent or associated territories and of equivalent measures in the US and key third countries have been obtained, and on the basis of a report, the Council will decide on the adoption and implementation of the directive no later than 31 December 2002, and do so by unanimity.
When the directive is adopted, member states may operate a withholding tax for a transitional period but must agree to implement exchange of information as soon as conditions permit and in any case no later than seven years after the entry into force of the directive. Those countries that opt to operate a withholding tax regime agree to transfer an appropriate share of their revenue to the investor's state of residence. This provision is to accommodate a minority of member states which will be unable to move immediately at that time to an exchange of information. Ireland, along with the majority of member states had indicated that it will not need to avail of this transitional option.
While the outcome of the discussion at Feira on the savings tax is to be welcomed, it is important to note that the detailed work on the various substantial outstanding issues will have to be pursued during the coming months. This work will be pursued in parallel with the other elements of the tax package, i.e. the code of conduct, business taxation, and the draft directive on interest and royalties.