Report from the Commission to the Council in accordance with Article 18 of Council Directive 2003/48/EC on taxation of savings income in the form of interest payments

Article 18 of Council Directive 2003/48/EC of 3 June 2003 (the "Savings Directive") states that "The Commission shall report to the Council every three years on the operation of this Directive. On the basis of these reports the Commission shall, where appropriate, propose to the Council any amendments to the Directive that prove necessary in order better to ensure effective taxation of savings income and to remove undesirable distortions of competition."

The report for the first review was prepared in 2008 and covered the transposition and implementation of the Directive, summing up the economic evaluation and the Commission's advice on the need for changes. The necessary changes identified in the 2008 report were primarily meant to clarify certain interpretational issues and to close existing loopholes. To that end, the Commission adopted an amending proposal to the Directive on 13 November 2008 with a view to closing existing loopholes and better preventing tax evasion.

The report for this second review primarily covers the functioning and an economic evaluation of the Directive. The main findings of this document, i.e. the widespread use of offshore jurisdictions for intermediary entities and the growth in key markets that provide products comparable to debt claims, reinforce the arguments for extending the scope of the Directive and the relevant agreements concluded in accordance with Article 17 of the Directive.

These findings are also consistent with the political commitment expressed by the G20 to promote compliance with international tax and financial information exchange standards and to use all the countermeasures available to combat tax havens and non-cooperative jurisdictions that do not comply with these standards.

The Commission Staff Working Document accompanying this report provides more factual details (see Related URL).

EUR-Lex: COM(2012)065: Follow the progress of this document through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2012:065:FIN

European Commission: SWD(2012)16: Commission staff working document presenting an evaluation for the second review of the effects of the Council Direcive 2003/48/EC http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2012:0016:FIN:EN:PDF

---