European Commission unveils tougher rules on automatic exchange of tax information
Tax authorities within the EU will have to comply with much more extensive rules on the automatic exchange of tax information, if member states adopt a European Commission proposal unveiled today.
The change would bring the EU closer to its own version of the Foreign Account Tax Compliance Act (FATCA).
The move would mean that the Administrative Cooperation Directive, which is due to come into force on January 1 2015, would be revised to include dividends, capital gains, all other forms of financial income and account balances. As of now, the Directive will require the automatic exchange of tax information related to employment, directors' fees, life insurance, pensions and property.
"With today's proposal, member states will be better equipped to assess and collect the taxes they are due, while the EU will be well positioned to push for higher standards of tax good governance globally,â€ Algirdas Semeta, the EUâ€™s tax commissioner said today during a press conference at which he presented the proposal. â€œIt will be another powerful weapon in our arsenal to lead a strong attack against tax evasion."
Member states already exchange other types of tax information under the Savings Tax Directive, which requires them to collect data on the savings of non-resident individuals, and automatically provide this data to the tax authorities where those individuals reside. Member states have committed to adopting a revised, stricter version of this directive before the end of the year.
The Commission said that today's proposal, if adopted, along with the two directives, would mean that member states would share as much information among themselves as they have committed to doing with the US under FATCA.
Semeta said Michel Barnier, the EU commissioner for the single market, would be introducing proposals on improving companies' transparency soon.