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19 december 2003

E-15 agreement on savings taxation directive

Following many years of negotiation, European finance ministers approved the Savings Taxation Directive in January 2003.


Member States will implement a system for automatically exchanging information on the payment of interest to non-residents. This will apply to all Member States, except Belgium, Luxembourg and Austria. These three are allowed to apply a withholding tax that will increase from 15% to 35% over a six-year transitional period. They will return 75% of this withholding tax to the investor's country of residence.

Banks prepare for implementation

  • The Directive applies to interest income on all types of debt instruments.

  • It will enter into effect on 1 January 2005, provided that certain third countries (notably Switzerland, Andorra, Liechtenstein, Monaco, and San Marino) implement similar measures.

In France, the Directive will be adopted in the Remedial Finance Act for 2003. The banking industry was able to gain assurances that obligations concerning declarations to tax authorities would not enter effect until 1 January 2005. This is because the information exchange system requires that data-processing procedures be reorganised to prepare the universal tax form.

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