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Insurance Europe in general supports measures aimed at combating tax evasion. Whilst tax evasion is corrosive to the fairness of a tax system, any rules that are introduced to prevent tax evasion need to be targeted and proportionate.
In developing reporting and transmission standards to prevent tax evasion, Insurance Europe believes that:
Against this background, Insurance Europe is supportive of the work on automatic exchange of information undertaken by the OECD to develop a uniform global approach. National or regional tax information regimes would lead to duplicate reporting, excessive costs, and complex system designs for the insurance industry. European insurance companies could potentially be subject to several different reporting regimes: Domestic reporting regimes; the European Union Savings Directive (EUSD); FATCA; the Administrative Cooperation Directive (ACD).
However, any moves into automatic exchange of information should be assessed against existing and envisaged regulatory measures. Insurers are currently grappling with a number of regulatory changes at domestic, EU and global level. All these changes come at cost and global AEOI will add to this cost. Furthermore, differences between business models and between insurance products and other financial products must be considered as the new system is designed. Most of the existing financial reporting regimes were designed with the banking industry in mind and other industries have had to fit within a regime afterwards. This has led to considerable administrative issues.
With this response, Insurance Europe sets out its key concerns regarding the overall principles that should govern the AEOI. Insurance Europe then comments on the questions raised by the OECD in its consultation document.