21 June 2013

ECOFIN Council results: Combating tax fraud - Automatic exchange of information

The Council held a brief exchange of views. It called on the working group to start technical work on the proposal to amend Directive 2011/16/EU on administrative cooperation in the field of direct taxation, by extending the scope for the mandatory automatic exchange of information.

The proposal is intended to enable the Member States to combat tax fraud and tax evasion better, and the Commission cites two main objectives. Firstly, increased tax revenues would provide greater scope for restructuring tax systems in a way that better promotes economic growth. Secondly, in difficult economic times, the proposal will reduce the pressure on honest taxpayers to compensate for revenue losses incurred due to fraudsters and tax evaders.

At its meeting on 22 May, the European Council called for priority to be given to the automatic exchange of information at the EU and global levels. Directive 2011/16/EU provides a framework for mutual assistance between Member States, especially via the exchange of information, so as to enable them to better assess taxes due. It sets out the details to be specified in requests for information on taxpayers, and prevents requests from being refused on grounds of bank secrecy.

As concerns the automatic exchange of information, the Directive sets out a step-by-step approach for the categories of income and capital covered.

Under the Commission's proposal, dividends, capital gains, other financial income and account balances would be brought within the scope of the automatic exchange of information; and the scope of a revision of the Directive, scheduled for 2017, would be expanded.

The agreements that many governments are concluding with the United States as regards the US foreign account tax compliance act (FATCA) have given further impetus to the automatic exchange of information as a means of combating tax fraud and tax evasion. In April, Germany, Spain, France, Italy and the United Kingdom announced a pilot action using the FATCA as a model.

Based on article 115 of the Treaty on the Functioning of the European Union, the Directive requires unanimity for adoption by the Council, after consulting the European Parliament.

Full results

Proposal, 14.6.13

Šemeta speech

© European Council