Oct 14, 2014 - an amendment of the text of the Directive on Administrative Cooperation in the Field of Taxation ... and
October 2014
Tax alert
European Council extends the scope of Automatic Exchange of Information, adopts the OECD Common Reporting Standard and plans a repeal of the Savings Directive On 14 October 2014, the European Council of Economic and Financial Affairs (ECOFIN) agreed to an amendment of the text of the Directive on Administrative Cooperation in the Field of Taxation 2011/16/EU (DAC). The revised DAC will enlarge the scope of the mandatory and automatic exchange of information (AEI) between Member States’ tax administrations. It was agreed that the provisions of the revised DAC would be applicable by 1st of January 2016 (2017 in Austria). Since direct taxation is not harmonized within Europe, this proposal aims to reduce tax evasion and increase tax collection in the Member States. The current Directive requires the automatic exchange of information on income and assets of five types: employment income, directors’ fees, life insurance products not covered by other Directives, pensions, ownership of and income from immovable property. The new proposal adds other types of information to AEI. The additional information is related to interest, dividends, other income from assets held by a custodial institution, sales and redemption proceeds from financial assets, as well as financial information such as aggregated annual accounts data. In essence, this proposal is based on the OECD’s Common Reporting Standard (CRS). The CRS aims to be the Global Standard for Automatic Exchange of Information. 44 countries had indicated their intention to be Early Adopters with a first exchange of information in 2017 based on information of fiscal year 2016. With the adoption of the DAC, the 28 EU Member States are creating a legislative framework for the EU Member States to apply the Global Standard of AEI among themselves and Luxembourg thus restates its commitment to adopt the CRS regime. Financial Institutions will be required to identify residency of customers and annually report financial account information as from 1 January 2016. Due to the extension of the scope of the DAC, it has also been proposed to repeal the Savings Directive 2003/48/CE in order to have just one standard in the EU, the Global Standard, and avoid legislative overlaps.
For additional information with respect to this Alert, please contact the following: Patrice Fritsch +352 42 124 8950
[email protected]
Olivier Maréchal +352 42 124 8948
[email protected]
Christian Daws +352 42 124 7196
[email protected]
Marie-Sophie.Dervieu +352 42 124 7039
[email protected]
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