This should make it easier to find hidden funds and tackle tax evasion, according to the EU, which claims it has made ‘great progress’ in closing existing loopholes.

Speaking after an EU Council meeting yesterday, EU tax commissioner Algirdas Semeta said: ‘It is clear that we are very near the finishing line. With the EU leaders’ endorsement next week, I believe that the Savings Tax Directive will still be adopted before the end of this month.’

Semeta described discussions as ‘constructive’ and said it was clear that ‘all our member states are now behind greater tax transparency’.

The Directive will form part of the legislative framework for applying the new global standard of automatic exchange of information within the EU and will be fully consistent with the Organisation for Economic Cooperation and Development (OECD) work in this area.

Semeta also said that the EU was closer to reaching tax agreements with five countries which had previously been reluctant to consider automatic information exchange. Talks with Switzerland, Liechtenstein, Andorra, Monaco and San Marino on the revision of their EU savings agreements  were making ‘good progress’, with all five countries ready to work towards alignment with the EU when it comes to tax transparency, in keeping with the global standard.

He said ‘that is not something we could have foreseen even one year ago’.

The decision by the outstanding five countries should pave the way for Austria and Luxembourg to sign up as they refused to endorse the scheme until action was taken to close down perceived tax havens.

‘The EU stands on the brink of reaching historic agreements with our neighbouring states that, not long ago, we would not have thought possible. After two rounds of negotiations, I can confidently confirm that our interlocutors have accepted that we must all now focus on automatic exchange of information and that the global push in this direction will provide an answer to concerns about the level playing field,’ Semeta said.