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EU may seek tax-avoidance talks with Hong Kong, Singapore

The European Union is seeking to open talks on curbing tax avoidance with Hong Kong, Singapore and Macao, as a year-old agreement among European nations fails to capture undeclared revenue. The European Commission, the EU's executive agency in Brussels, named the three plus Dubai, Bahrain, the Bahamas, Japan and Canada as potential targets for tax talks. EU governments will decide later this year which countries to pursue. The EU has called the expansion necessary since before the European initiative took effect July 1, 2005. The Swiss government said April 5 the first six months netted just 103 million Swiss francs ($84 million) for EU countries. “There is more and more, a growing sense that we have to cooperate at the international level if we want to avoid tax evasion,” Maria Assimakopoulou, commission spokeswoman for tax, said to journalists. Bank for International Settlements data show $158.1 billion in foreigners' bank accounts in Singapore and $82 billion in Hong Kong as of the end of September, according to a commission document prepared for today's meeting. Foreign deposits in Macao more than doubled in 2005 to $5.8 billion from $2.4 billion, the paper said, citing the country's monetary authority. “Conducting discussions simultaneously with a large number of administrations spread across the world is unlikely to be effective,” the document said. EU governments “will need to prioritize among leading financial centers and select with which to initiate discussions.” (Bloomberg)