Proposal for a Council Directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation

Author (Corporate)
Series Title
Series Details (2013) 348 final (12.6.13)
Publication Date 12/06/2013
Content Type

In recent years, the challenge posed by tax fraud and tax evasion has increased considerably and has become a major focus of concern within the European Union and worldwide. Billions of euros are being lost. By reducing fraud and evasion Member States could increase tax revenues which would also provide them with added scope to restructure their tax systems in a way that better promotes growth as outlined in the 2013 Annual Growth Survey. In addition, given the order of magnitude of the challenge, stepping up the fight against tax fraud and evasion is not only an issue of revenue, but also of fairness. Particularly in these difficult economic times, honest taxpayers should not suffer additional tax increases to compensate for revenue losses incurred due to tax fraudsters and evaders.

For years, the European Union (EU) has been working actively on these problems, in particular by adopting specific legal instruments to implement automatic exchange of information ("AEOI") within the Union. The EU Savings Directive (the "EUSD") ensures AEOI on interest income and a proposal to enlarge its scope is under discussion in the Council. The Directive on Administrative Cooperation (the "DAC") ensures that, from 2015, Member States will exchange information automatically upon availability on five categories of income and capital: employment, directors' fees, life insurance products not covered by other Directives, pensions and ownership of and income from immovable property.

Member States have now expressed a clear wish to go beyond current levels of cooperation. The European Council of 2 March 2012 invited the Council and the Commission to develop rapidly concrete ways to improve the fight against tax fraud. On 6 December 2012, the Commission presented an Action plan to strengthen the fight against tax fraud and tax evasion. The Action Plan highlights the need to promote AEOI as the European and international standard of transparency and exchange of information in tax matters. On 14 May 2013, the ECOFIN Council adopted conclusions welcoming the work by the Commission on developing measures to combat tax fraud, tax evasion and aggressive tax planning and recognising the useful role the Commission Action Plan can play in this regard.

The objective of the present proposal is, therefore, to expand the scope of AEOI in the EU beyond that provided for in existing EU automatic information exchange arrangements. It would bring the following other items within the scope of the AEOI: dividends, capital gains, other financial income and account balances. The provision for a review and expansion of the DAC in 2017 would remain. However, in line with the objective of enhancing AEOI the removal of the condition of availability would now be considered at that time in respect of all five existing categories together so that the DAC would cover the full range of income. Furthermore, the categories to be considered for inclusion at that time would be amended in the light of the present proposal (see below). Extending the scope of the AEOI would also contribute to ensuring equality of treatment between different types of assets and to avoiding undesirable reallocation of portfolios.

The Commission proposes to remove the reference in Article 8(3) of the Directive to a threshold below which a Member State may not wish to receive information from other Member States. Discussions have revealed that such a threshold is not practical for the Member States that are required to report. However, a Member State could continue to opt not to receive any information on a particular category of income.

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Related Links
EUR-Lex: COM(2013)348: Follow the progress of this proposal through the decision-making procedure
ESO: Background information: Fighting tax evasion: Commission proposes widest scope of automatic exchange of information within the EU

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