Commission Wants Widest Scope of Automatic Exchange of Information within the EU
19 June 2013
Posted by: Author: Chartered Accountants Ireland
Author: Chartered Accountants Ireland
The EU Commission has proposed extending the automatic exchange of information between EU tax administrations to include information on dividends, capital gains, all other forms of financial income and account balances. This paves the way for the EU to have the most comprehensive system of automatic information exchange in the world with a view to clamping down harder on tax evasion.
Automatic exchange of information is currently provided for under the EU Savings Tax Directive, relating to automatic exchange of information on savings income, and under the Administrative Cooperation Directive. The Administrative Cooperation Directive entered into force in January 2013 and provides for the automatic exchange of available information on income from employment, director's fees, life insurance products, pensions, and immovable property with effect from 1 January 2015. The Commission are now proposing that the scope of the Administrative Cooperation Directive be extended to ensure that dividends, capital gains, other financial income and account balances are also covered by automatic information exchange from 1 January 2015.
Under automatic exchange of information system, Member States collect data on income earned in their territory by non-resident individuals. They then automatically transmit this data to the authorities where the individual resides, so that it can be taxed in line with that Member State's residency rules.
If the Commission’s proposal is successful then EU legislation (Savings Directive and Administrative Cooperation Directive) will provide for the same scope of automatic exchange of information between Member States as is required under the US FATCA.
For further details see here