The European Union's Council Of Members has finally announced that the European Savings Tax Directive will commence on 1 July 2005, less than a year away and 6 months later than planned.
The Directive means that EU member states must either exchange client information on accounts investors hold or deduct withholding tax from interest payments for non-residents.
Austria, Belgium and Luxembourg will be deducting withholding tax from interest paid to non-residents. This will amount to 15% until 2007, 20% until 2010 and 35% from 2011 onwards.
Our View
The introduction of the Directive will mean better quality information for each participating country on where their residents invest, and technically how much.
Big brother will be watching so don't forget to include your offshore accounts and interest on your tax returns!