EU goes after expats’ money in Asian havens

BRUSSELS (Reuters) – Wealthy citizens in the European Union could see their savings in Asia taxed under plans considered by the bloc’s member states yesterday. In July last year, the bloc introduced a set of rules to tax the savings people hold outside their home country in the Union or in 15 non-EU states, such as Switzerland. EU ministers also agreed at the time to try to widen the net to close potential loopholes, such as citizens parking their cash in Asia to avoid the European Union tax. The European Commission, the bloc’s executive arm, has suggested opening initial talks with Hong Kong, Singapore and Macau, top Asian financial centers that attract European cash. Officials from member states were discussing the suggestion until late yesterday. An official from current EU president Finland said the response was positive and that it would be discussed by member-state diplomats and ministers for a formal decision. Singapore is the EU’s 13th-largest trading partner and accounts for 30 percent of EU-Asia trade, while Hong Kong promotes itself as a destination for foreign investment that is free from withholding or other taxes, the Commission said in a document. Singapore has tax agreements with many EU countries but there is no provision for exchanging information on request. Hong Kong has also concluded tax agreements with some member states, while Macau was becoming a more important financial center, the EU executive body said. «We are ready if member states want us to start talks,» said Maria Assimakopoulou, spokeswoman for EU Tax Commissioner Laszlo Kovacs. «But all this could take several years,» Assimakopoulou said. Changes to EU tax rules can take a long time, as unanimity is required among the member states to make a decision. The EU executive is also monitoring whether EU citizens are shifting savings offshore to avoid the savings tax net, but it said it was too early to draw conclusions. Commission officials are disappointed with the money raised by the savings rules, but said it was unclear whether this was due to poor application of them. They noted problems in obtaining adequate data about accounts from outside the EU as such information often excluded stocks, bonds and derivatives.