Luxembourg is to participate in the automatic exchange of tax information with other EU countries by 2015, bowing to pressure from the US and the EU.
Luxembourg’s Prime Minister Jean-Claude Juncker said the government will set up an automatic exchange of tax information "to ensure taxation according to the laws" of the customer’s home country and to preserve the country’s reputation as financial hub.
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"If today we change our position, it is not because of European pressure, although 25 countries are strongly in favour of the automatic exchange of information, but because the Americans do not leave us a choice. If we refuse to do so, there will be no more financial business with the United States, which is inconceivable for an international financial centre such as Luxembourg," he said.
"To this end, it was a good choice of the Luxembourg financial centre to focus on a strategy of white money. The financial sector saw no black money or tax evasion. This is why we can safely apply the automatic exchange of information from 1 January 2015," Juncker added.
As Europe’s five largest countries signed similar agreement earlier this week, pressure was on Luxembourg and Austria to cooperate and relax their banking secrecy policy.
It was reported that the Austrian Chancellor, Werner Faymann, was considering implementing similar agreements.
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