Luxembourg taken off tax transparency "grey list" (Roundup)

Jul 8, 2009, 14:29 GMT

Luxembourg - Luxembourg has been removed from a 'grey list' of countries seen by the Organization for Economic Cooperation and Development (OECD) as lacking financial transparency, the country's Budget Minister Luc Frieden said Wednesday.

The Paris-based OECD has put the Grand Duchy on its grey list over complaints that it did not do enough to cooperate with other countries over tax affairs. Austria and Switzerland are also on the list.

'As of this afternoon Luxembourg will be on the OECD tax haven white list,' Frieden said.

'This is very good news for the financial centre of Luxembourg,' he added.

The move was a result of Luxembourg agreeing deals with 12 other countries over double-taxation.

While Luxembourg became the first country to be moved from the grey list onto the so-called white list, Austrian opposition parties on Wednesday blocked a government proposal to ease banking secrecy rules.

As the green and far-right parties did not support such a move in Parliament, the ruling Social Democrats and centrist conservatives expressed their fear that Austria could face international sanctions for not complying with OECD standards.

Parliament is to take up the issue again in its fall session.

Austria, Luxembourg and Switzerland were put on the grey list at the beginning of April after a G20 summit aimed at cracking down on so-called tax havens.

Germany's Finance Minister Peer Steinbrueck compared Luxembourg to the West African city of Ougadougou, causing outrage in the Grand Duchy.

As a result of the row, Luxembourg has still to sign a double- taxation agreement with Germany.