Ethics and governance in the European Financial centers

Luxembourg signed a tax agreement on the OECD tax model with France to improve its image.

I am afraid this will not hush up litigious issues at is seems that they did not sign up for the same purpose.

Let’s have a look on their respective press release:

The French press release states that: “les dispositions de cet article permettront à la France d’obtenir des renseignements sans limitation quant à la nature des impôts, des personnes et des renseignements visés par la demande de renseignements. Ces demandes de renseignements pourront ainsi désormais porter sur des renseignements bancaires sans que la législation interne luxembourgeoise puisse y faire obstacle (...) La signature de cet avenant contribue à la lutte contre la fraude et l’évasion fiscales, puisqu’il permet désormais à la France d’obtenir des renseignements de la part des autorités luxembourgeoises sans limitation quant à la nature des impôts, des personnes et des renseignements visés par la demande de renseignements. »

(free translation: the provisions of this article will make it possible for France to obtain information without limitation relating to the  nature of the taxes, the people and the information targeted by the request for information. These requests for information will be able from as of now to be about banking information without the Luxembourg national legislation being opposable to it (...) the signature of this endorsement contributes to the fight against fraud and tax evasion, since it makes it possible as of now for France to obtain information from the Luxembourg authorities without limitation as for the nature of the taxes, the people and the information aimed at by the request for information.”)

The Luxembourg press release states that: « Le protocole prévoit l'échange d'informations sur demande dans des cas individuels entre les administrations fiscales des deux pays. Il s’applique aux années fiscales 2010 et suivantes. L’accord n’a pas pour objet un échange automatique d’informations bancaires et n’autorise pas des demandes générales (fishing expeditions)."

(free translation: “The protocol envisages the information exchange on request in individual cases between the tax authorities of both countries. It applies to the financial years 2010 and following. The agreement does not have as an aim an automatic exchange of banking information and does not authorize general requests (fishing expeditions).”)

While Luxembourg does want neither the automatic exchange of banking information nor fishing expeditions, France believes that it will get “without limitation” (“information without limitation relating to nature of the taxes, the people and the information aimed at by the request for information “ is repeated twice in the press release) information on any taxpayer (its taxes, its bank accounts…).

What a charade.