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EU to start talks with non-EU countries on tax evasion

George Osborne says the EU savings directive is essential for the worldwide exchange of tax information.
Image caption George Osborne says the EU savings directive is essential for the worldwide exchange of tax information.

European Union finance ministers have agreed to start talks with five none-EU countries in a bid to tighten rules on bank secrecy and tax evasion.

The European Commission will now negotiate with Switzerland, Liechtenstein, Monaco, Andorra and San Marino on new rules for swapping bank account information.

Opposition by EU members Luxembourg and Austria had delayed the talks.

The talks aim to improve current information-sharing agreements.

"The decision represents an important step in the EU's efforts to clamp down on tax evasion and tax fraud," the Council of the European Union said in a statement.

The talks are aimed at securing a so-called EU savings tax directive, seen as a first step to creating a global standard on tax information.

Luxembourg and Austria had originally opposed the talks in a bid to defend their own bank secrecy rules, but their finance ministers have now dropped their objections.

An EU official told news agency Reuters that by giving the European Commission the go-ahead to negotiate with Switzerland, EU finance ministers hope to push for the same rules to be applied there as would be applicable to the wider EU.

A spokesman for Switzerland's department of finance said it was willing to cooperate.

"Back in 2009, Switzerland had already declared its willingness in principle to discuss extending the EU savings tax agreement so as to close loopholes," said the spokesman.

UK chancellor George Osborne has described the EU savings directive as an essential pre-condition of developing worldwide exchange of tax information.

"Unless Europe can show it can agree on this existing proposal, our commitment to a new, stronger standard will not be credible," Mr Osborne said earlier this week.

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