The Union has freshened up its tax playbook, nodding through revised cooperation deals with Switzerland, Liechtenstein, Andorra, Monaco and San Marino. From 2026 onwards, the deals are to cover electronic-money wallets and crypto holdings.
The Council agreed the texts on 20 November, updating a 2015 regime that already obliged the quintet to swap bank-account data with EU treasuries. From 2026 the swaps will extend to electronic-money wallets and crypto holdings. Tax officials will also gain quicker ways to chase unpaid value-added tax and pick holes in suspect filings.
Two gains
Brussels officials call the move “technical”. In form, that is true. The OECD tweaked its Common Reporting Standard in 2022, so the EU had to follow suit. The five neighbours—keen to stay off any blacklist—signed without fuss; ambassadors approved the lot in minutes. Yet the step hints at something larger. Europe’s tax map is shifting again, and the go-between role of these micro-states and of Switzerland will matter more, not less, in the age of crypto assets and minimum corporate levies.
Tax chiefs see two gains. First, the new rules keep evaders from hiding funds in digital form. Second, member states can pool firepower to recover VAT, a tax that raises a third of EU revenue. The deals tighten due-diligence checks and force faster data hand-offs. National treasuries like the extra ammo.
Look closer, and the timing seems bold. The OECD’s separate plan for a 15 per cent global corporate floor—Pillar Two—now wobbles. America’s politics threaten full implementation. Governments might hedge by soft-peddling other tax pledges. Should that happen, Brussels will need every enforcement hook it can find. Automatic data flows from its Alpine and Mediterranean neighbours give one such hook.
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Pressure on small players
Digital VAT adds a second layer of intrigue. Italy, for instance, wants tech giants to pay levy on the “value” of user data. The Commission disagrees. Its recent working paper narrows the legal basis for Rome’s claim. That split could complicate the shiny new VAT-recovery clauses. Disputes over digital services risk spilling into talks with Switzerland, where online platforms enjoy large footprints.
Even goodwill carries limits. Monaco and Andorra have long traded on nimble banking rules. Liechtenstein built a trust industry. Each country has inched closer to EU norms, but grudges linger. Some officials whisper that Andorra drags its feet on timely reports; others complain that Swiss banks do not always flag beneficial owners fast enough. The updated deals promise swifter exchanges, yet they cannot erase history overnight.
The five partners view the bargain as the price of access. Their firms rely on passport-free travel and tariff-free trade with the single market. Brussels uses that leverage. The Council’s unanimity masks hard bargaining behind closed doors. Smaller states fret about sovereignty; larger ones wield blacklist threats. For now, everyone smiles. But the cycle of pressure and compliance will repeat as finance keeps mutating.
Two big fish
Next in line is Norway. The Council has already granted a mandate to start talks on direct-tax cooperation with Oslo. That file should run smoothly—Norway has adopted most EU rules via the European Economic Area. Yet the expansion underlines a truth: Brussels wants a perimeter fence that matches its own standards, and it will extend it country by country if needed.
Switzerland looms largest. The statement accompanying the agreements says that “The EU will also seek to now deepen cooperation in tax matters even further with Switzerland.“ Officials hint at a broad accord covering corporate-tax breaks for manufacturers, VAT on digital services and joint audits. Swiss diplomats play down haste, but Bern knows the drill. In past spats—over stock-exchange equivalence, for instance—the EU showed it can squeeze when talks stall.
The EU will seek to now deepen cooperation in tax matters even further with Switzerland. — a European Council press release
Does any of this raise money? Yes, though not a windfall. The Commission reckons stricter reporting cut hidden interest income by €9 bn a year after the 2015 rules. Extending the net to crypto might claw back another billion. Better VAT recovery could add more. In tough budget talks, every bit counts.
Panta rhei
The real prize is deterrence. When data arrive automatically—complete with wallet addresses and cross-border invoices—tax dodging loses its shine. Firms that once shuffled revenue through tiny principalities may think twice. Private bankers who once pitched secrecy now sell compliance software. The EU, often slow, has moved before the next scandal breaks.
Still, nothing in tax stays fixed. Pillar Two’s fate, fresh brawls over digital levies and the rise of tokenised assets will test this framework. If America waters down the global minimum tax, some European states may ask why they tightened their own nets. Diplomats will again gather in Brussels rooms, updating annexes and coffee mugs alike. The five micro-states and Switzerland will sit across the table, ready to sign—once more—to keep the gates to Europe open.
