European countries are implementing the European Savings Tax Directive in an attempt to cut down tax evasion between the economies. 12 of the 15 EU countries have agreed to pass information between themselves on interest received as income by investors so that proper rates of tax can be charged.
This will take effect from 1st January 2004 and each country's authorities will have six months in which to pass the interest information on. 3 countries have not signed up to the directive, Austria, Belgium and Luxembourg. These countries will impose a tax on interest payments called withholding tax. By holding back a certain amount of interest in tax these countries will not disclose their banking records.
Due to the UK's taxation year running from 6th April to 5th April we would be the first EU country to disclose our information to other countries authorities.