Brussels pushes for more tax disclosure

DETAILS OF the financial status of individuals in the EU – including dividends, capital gains, and other forms of financial income, plus account balances – are to be added to the automatic exchange of information between EU tax administrations under a proposal aired today by the European Commission.

The anti-tax evasion move goes further than FATCA, according to Algirdas Šemeta (pictured), commissioner for taxation, speaking at a press launch. The measures are to be added to the existing Savings Tax Directive, which already ensure that governments pass tax relevant data of non-resident individuals to the authorities where they reside.

The development follows output from a gathering last month of national government ministers, which committed to revisions to the directive. However, the changes will require unanimous approval by all EU member states, because tax is involved. Asked if dissent could come from any recalcitrant governments, Šemeta thought this unlikely. He added: “Nobody spoke against the matter at Ecofin [the council meeting of the ministries]”.

The new rules to combat tax evasion are planned to be in force from 1 January 2015. Meetings are planned with countries neighbouring the EU with a view to spread the anti-tax-evasion measures.

While commercial entities such as banks, investment funds, and insurance companies, will have to play their role, the proposed rules do not cover tax evasion by corporations.

Further proposals covering that sector are expected from the internal markets director general in the commission in the near future, said Šemeta.