Earlier this week, the EU Council of Ministers adopted a Directive strengthening EU rules on the exchange of information on savings income, aimed at enabling member states to better clamp down on tax fraud and tax evasion.
The existing European law, Directive 2003/48/EC, requires the member states to exchange information automatically so as to enable interest payments made in one member state to residents of other member states to be taxed in accordance with the laws of the state of tax residence.
The new Directive enlarges the scope of the earlier Directive, reflecting changes to savings products and developments in investor behaviour since it came into force in 2005. The scope now covers new types of savings income and products that generate interest or equivalent income. It includes life insurance contracts, as well as a broader coverage of investment funds. In addition, tax authorities, using a "look-through" approach, will be required to take steps to identify who is benefiting from interest payments.
In December last year the Council called for the amending Directive to be adopted by March 2014, given its significance in combating tax fraud and tax evasion. The member states will have until 1st January 2016 to implement the new measure.
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This blog post is intended as a news item only - no connection between Lewis Nedas and the parties concerned is intended or implied.
