Following agreement at ECOFIN last month, the European Council unanimously agreed to the Savings Directive amendments. After six years of negotiations, the amended Directive will cover new types of savings income and products such as life insurance contracts, and a broader range of investment funds. The revised Directive provides for tax authorities, using a “look-through” approach, to take steps to identify who is benefiting from interest payments and for the automatic exchange of information between Member States.

José Manuel Durão Barroso, President of the European Commission hailed the agreement of the revised Directive as “..bringing an end to banking secrecy in Europe”.

Luxembourg and Austria previously opposed amendments to the Directive on the grounds that equivalent measures needed to be concluded between the EU and third countries, namely Switzerland, Liechtenstein, Andorra, Monaco, and San Marino.

According to an article in the Financial Times, Algirdas Šemeta, EU commissioner responsible for taxation said that he was confident an agreement could be obtained with other key jurisdictions by the end of the year. In the article he is quoted as saying “Switzerland and the four other countries now accept that the automatic exchange of information must be at the core of their relations with the EU in taxation. This would have been inconceivable even a year ago, and it shows how far we’ve come in changing mindsets globally I have assured member states that our negotiations with these countries will continue with speed and ambition, with the aim of presenting results before the end of the year.”