| Author (Corporate) | European Commission |
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| Series Title | COM |
| Series Details | (2016) 452 final (5.7.16) |
| Publication Date | 05/07/2016 |
| Content Type | Policy-making |
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The European Commission is pursuing an ambitious agenda against tax evasion and avoidance, with a view to delivering fairer and more effective taxation in the EU. Increasing tax transparency is central to this agenda. Over the past few years, significant progress has been made in enhancing tax transparency and strengthening the cooperation between tax authorities across the EU. Member States have agreed on new legislation to automatically exchange information on tax rulings and on tax-related country-by-country reports of multinationals. In April 2016, the Commission also proposed that large multinationals should publicly disclose a specified set of tax-related data on a country-by-country basis. With regard to individuals' accounts, new EU legislation entered into force in January 2016, under which Member States' tax authorities will automatically exchange information on financial accounts held abroad. This will help prevent funds from being hidden offshore to escape taxation. Recent media leaks, which exposed the large scale concealment of offshore funds, confirm the importance of the EU's tax transparency agenda. They also highlighted areas where further measures still need to be taken to reinforce the EU and international transparency framework. In particular, it has become apparent that tax authorities need greater access to information on the beneficial owners of intermediary entities and other relevant customer due diligence information, if they are to effectively identify and address tax evasion. Directive 2014/107/EU amending Directive 2011/16/EU ("Directive on Administrative Cooperation"), which was adopted in 2014, implements the Global Standard for Automatic Exchange of Financial Account Information in Tax Matters within the EU. As such, it ensures that information on account holders of financial accounts is reported to the Member State where the account holder is resident. In addition, the Directive foresees that, where the account holder is an intermediary structure (i.e. a Passive Non-Financial Entity), the Financial Institutions shall look through that Entity and identify and report its Controlling Persons (beneficial owners in anti-money-laundering terminology). That important element in the application of the Directive involves a step relying entirely on anti-money-laundering ("AML") information for the identification of the Controlling Persons. Without access by the tax authorities to that AML information, the effectiveness of the monitoring of Financial Institutions on applying the Directive on Administrative Cooperation will be reduced significantly. In the absence of that information, those authorities will not be able to monitor, audit and confirm that the Financial Institutions apply properly the Directive and identify correctly and report the Controlling Persons of intermediary structures. Therefore, the objective of this initiative is to enable tax authorities to consistently access the AML information for the performance of their duties in monitoring the proper application of the Directive on Administrative Cooperation by Financial Institutions. See also: |
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| Source Link | Link to Main Source http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2016:452:FIN |
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| Subject Categories | Justice and Home Affairs |
| Countries / Regions | Europe |
