UK and International Tax news
EU Automatic Exchange Of Information Update
Thursday 20th June 2013
Further to our International Tax News article of 19 December 2012 in which we reported that the EC had recently announced new EU rules to improve member states’ ability to assess and collect taxes would enter into force on 1 January 2013 [Directive on Administrative Cooperation 2011/16/EU], the EC has recently proposed extending the automatic exchange of information between EU tax administrations, as part of the intensified fight against tax evasion. Under the proposal, dividends, capital gains, all other forms of financial income and account balances are to be added to the list of categories which are subject to automatic information exchange within the EU.
Automatic exchange of information within the EU is provided under the EU Savings Tax Directive which requires member states to collect data on the savings of non resident individuals and automatically provide this data to the tax authorities where those individuals reside. This system has been in place since 2005.
The proposal is on the table in the EC to strengthen this Directive and enlarge its scope. At the EC in May 2013, member states committed to adopting the revised Savings Directive before the end of the year.
The Administrative Cooperation Directive foresees the automatic exchange of information on other forms of income from 1 January 2015, including employment, directors’ fees, life insurance, pensions and property.
The EC’s recent announcement seeks to revise the Administrative Cooperation Directive in order for automatic information exchange to apply also to dividends, capital gains, other financial income and account balances from that date.
This expansion to the provisions on automatic exchange will mean that member states will share as much information amongst themselves as they have committed to do with the USA under FATCA rules.Contact Us