Press Release: Taxation of savings: The European Commission proposes changes to eliminate tax evasion

The European Commission adopted an amending proposal to the Savings Taxation Directive, with a view to closing existing loopholes and eliminating tax evasion. Since 2005, the Savings Directive ensured that paying agents either report interest income received by taxpayers resident in other EU Member States or levy a withholding tax on the interest income received. The Commission proposal sought to improve the Directive, so as to better ensure the taxation of interest payments which are channelled through intermediate tax-exempted structures. It also proposed to extend the scope of the Directive to income equivalent to interest obtained through investments in some innovative financial products as well as in certain life insurances products. Moreover, simplification of the technical operation of the Directive should lead to a more user friendly system and more efficient implementation.

European Commission: MEMO/08/704: Review of the Savings Taxation Directive – Frequently Asked Questions http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/704&format=HTML&aged=0&language=EN&guiLanguage=en

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