The Council agreed on 3 June 2003 as part of a package of three measures to tackle harmful tax competition on a Directive to ensure effective taxation of savings income.
Under the Directive which as anticipated will apply from 1 July 2005 , each Member State will provide information to other Member States on interest paid from that Member State to individual savers resident in those other Member States. But for a transitional period, Belgium , Luxembourg and Austria will be allowed to apply a withholding tax instead of providing information, at a rate of 15% for the first three years, 20% for the subsequent three years and 35% thereafter.