The EU Commission held a full day meeting with experts to explain its plans for developing full multilateral automatic exchange of tax information across the EU. Of, course the EU already has the Savings Tax Directive, but that only covers interest income, and plans to extend it have long been held up by objections from Belgium, Luxembourg and Austria that they were not prepared to agree to the extension until certain issues, like automatic information exchange with Switzerland and the treatment of ‘Anglo-Saxon’ trusts had been resolved.
The EU has opened discussion with Switzerland, and we were in Brussels a couple of weeks ago making a major presentation on trusts (to all 27 Member States, including Belgium, Luxembourg and Austria), so the Savings Tax Directive project is inching forward. In the meanwhile, however, it is clear that politically the EU is keen to develop its own version of FATCA as quickly as possible. Its chosen way of doing this is to extend the Administrative Co-operation Directive (DAC, another acronym for the lexicon!) to cover all payments and account values by 2015.
The Commission objection to FATCA is that it is US-centric and not really suitable for multi-lateral rather than bi-lateral information exchange. All of which is true and the reason why the G-8 has asked the OECD to work on its own model for multi-lateral automatic information exchange.
As all the experts in Brussels (including STEP) therefore pointed out, the result is that potentially over the next 2 years the industry will have to work on implementing 3 different tax information exchange systems at once – FATCA, DAC and whatever the OECD comes up with – each basically designed to do the same thing but each doing it slightly differently. This is clearly absurd, but it will be interesting to see who blinks first.
The STEP Blog 
FATCA is ridiculous in the first place. The United States should be adopting a residence-based tax system as opposed to a citizenship based system like 99 percent of the rest of the world. This legislation will only further impede on the national sovereignty of other nations and further fuel American resentment. FATCA has potential implications extending beyond ‘American persons’, this is an extremely expensive compliance program to enforce and customers of these banking institutions will most likely have to bear the weight of this in increase banking fees. Offshore banking is a serious issue, but the American governments need to target the real culprits, increase corporate taxation and those that have complex methods to divert income reporting. There are many Americans in Canada who have no ties other then its their place of birth. Is it really fair to tax them for economic productivity that was not generated in the United States? absolutely medieval thinking from the United States government.