This content is from: European Union

EU: June ECOFIN Council debates mandatory AEoI, tax rulings and Interest & Royalties Directive

Bob van der Made

Proposal for mandatory automatic exchange of information (AEoI) with regard to tax rulings (DAC3)

Selected issues discussed:

  • The scope and timing of information to be exchanged, and further alignment with work carried out by the OECD;
  • The exemption of bilateral and multilateral advance pricing agreements (APAs) with third countries; and
  • The European Commission's role in the new mechanism with regard to DAC3, since the Commission is not a competent tax authority.

A number of finance ministers intervened in the ECOFIN public session: France, Germany, Ireland, Malta, Netherlands, Poland, Slovakia, Slovenia, Spain, Sweden and the UK. Most member states came out publicly in favour of the proposal, even though Council working group negotiations on the proposal apparently made very little progress in July.

Luxemburg said during the ECOFIN debate that it is an absolute priority for the Luxembourg EU Council presidency to adopt this proposal before the end of its presidency term (December 31 2015).

Interest & Royalties Directive Recast Proposal

To make progress on this 2011 Recast Proposal, the six-monthly rotating Latvian EU Council Presidency (January 1 2015 – June 30 2015) proposed to split up the Commission proposal in order to focus first on incorporating a GAAR clause, similar to the one added in January 2015 to the EU's Parent-Subsidiary Directive (that is, acting as a de minimis rule), while Council work would continue, in the meantime, on other remaining elements of the Directive, including:

  • a minimum effective level of taxation (not foreseen in the Commission's original proposal);and
  • a requirement for member states to inform each other in the event of the GAAR being invoked.

The Latvian presidency suggested that the above elements should be dealt with as part of the Recast Proposal, but it found no real traction on this during the ECOFIN meeting. Germany, France, Austria, Czech Republic, Greece and Italy insisted during the meeting that discussions in the Council should continue on the Interest & Royalties Directive Recast Proposal as a whole.

Bob van der Made (
PwC Brussels

Tel: +31 88 792 3696

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