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Tackling cross-border tax evasion: in build-up to G8, European Commission sets out plans for world's best system of information exchange
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The European Commission has proposed further beefing up the fight against tax evasion within the EU, by ensuring that governments automatically exchange information on dividends, capital gains and all other forms of financial income and account balances accrued on their territory by those not resident there.

The Commission's action today paves the way for the EU to have the most comprehensive system of automatic information exchange in the world.

    Tackling cross-border tax evasion: in build-up to G8, European Commission sets out plans for world's best system of information exchange

    It comes in the week before the G8 in Northern Ireland, where the EU, in tandem with the UK hosts, will push for the global introduction of a similar system, which will help developing countries to get more of the tax revenue they need and deserve.

    Today's steps will build on existing exchange of non-residents' savings details, which is due to be strengthened by the end of this year and on measures due to come into force on 1 January 2015 on the exchange of information on income from employment, directors' fees, life insurance, pensions and property.

    Completing the system for preventing cross-border tax evasion by individuals is a key part of the Commission's Action Plan on tax, put forward at the end of 2012. That Action Plan also dealt with corporate tax avoidance.

    Alongside the Action Plan, the Commission set out Recommendations to Member States on dealing with tax havens and on closing the legal technicalities and loopholes which some companies exploit to avoid paying their fair share.

    The clampdown on tax evasion within the EU also accompanies the mandate Member States have agreed – after two years of hold-ups - to give to the Commission to negotiate stronger savings tax agreements with Switzerland, San Marino, Andorra, Lichtenstein and Monaco.

    EU Taxation Commissioner Algirdas Ĺ emeta said: "With today's proposal, Member States will be better equipped to assess and collect the taxes they are due, while the EU will be well positioned to push for higher standards of tax good governance globally. It will be another powerful weapon in our arsenal to lead a strong attack against tax evasion."

    Background

    The automatic exchange of information means that Member States collect data on income earned in their territory by non-residents. They then automatically transmit this data to the authorities where the individual resides, so that it can be taxed in line with the Member State of residence's rules.

    These exchanges take place through a secure IT network (the CCN system) which ensures that EU data protection rules are fully respected. The information is exchanged using standard computerised formats that the Commission has developed in close cooperation with the Member States.

    Today's proposal, together with the above-mentioned provisions on automatic exchange, will mean that Member States spontaneously share as much information amongst themselves as they have committed to doing with the USA under the Foreign Account Tax Compliance Act (FATCA).

     

    For more information or to arrange interviews, please contact the London press office on 020 7973 1971.
    Please note: all amounts expressed in sterling are for information purposes only.

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    Last update: 12/06/2013  |Top