The power politics of international tax co-operation : Luxembourg, Austria and the automatic exchange of information
Title: The power politics of international tax co-operation : Luxembourg, Austria and the automatic exchange of information
Author: HAKELBERG, Lukas
Citation: Journal of European public policy, 2015, Vol. 22, No. 3, pp. 409-428
Luxembourg and Austria resisted exchanging bank data on non-resident interest income with European Union (EU) partners for over a decade. In March 2014 they eventually gave in. Theories of tax competition analysts usually apply to intra-EU bargaining over taxation cannot explain their change of tack. Instead, I argue that American imposition of bilateral exchange of information on the two countries unlocked negotiations at EU level. Concessions made to the United States (US) by Luxembourg and Austria activated a most-favoured nation clause contained in an EU directive. Moreover, the US also forced third countries to exchange bank data, thus reducing the risk of capital flight from Luxembourg and Austria.
Published online: 17 Jul 2014
Succeeding version: http://hdl.handle.net/1814/44147
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