Ethics and governance in the European Financial centers

The Fundation Robert Schuman has recently reported that he European Commission addressed a reasoned opinion to Luxembourg asking it to modify parts of its legislation in terms of savings taxation. The Commission believes that Luxembourg legislation is not compatible with parts of the "Savings" directive adopted in 2003 and for which the Commission has put forward an extension. This directive notably says that paying agents (banks, financial institutions etc ...) either report interest income received by taxpayers resident in other EU Member States or levy a withholding tax on the interest income received. However, Luxembourg also gives an exemption from withholding tax to interest payments made to beneficial owners who benefit from the so-called "non-domiciled resident" status in their country of residence. This allows Britons, Irish and Maltese citizens to avoid all taxation on the capital they invest in Luxembourg

That is not a surprise.