Thursday, May 23, 2013
Luxembourg to start show and tell
After years of being a preferred tax haven for the smart money, Luxembourg is set to open the books for other countries.
It was a blunt and unsettling message for a country whose opaque banks have sucked in hundreds of billions of euros from abroad and whose national motto — “We want to remain what we are” — is a credo of dogged resistance to change.True, secrecy will be gone, but money talks and there will always be safe place for it, if only in the hearts of politicians everywhere.
“Nothing is as it was before,” Prime Minister Jean-Claude Juncker told Parliament last month, explaining why, after years of resistance, Luxembourg had decided to start sharing information with foreign tax authorities about the money stashed in its banks. “Not everything has changed, but lots of things have changed. Other changes are necessary, or everything will change.”
The attention this week on the ability of Apple and other prominent American corporations to avoid corporate taxes through offshore tax arrangements obscures a perhaps more significant development, highlighted by Luxembourg’s abrupt retreat from banking secrecy: the relentless pressures being piled on opaque money centers around the world amid a sweeping global assault on tax evasion and the secrecy that enables it.
“Bank secrecy is a relic of the past,” said Algirdas Semeta, the European Union’s senior official responsible for tax issues. “Soon we will see the death of bank secrecy around the world.”
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