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On November 10, the European Council repealed Directive 2003/48/EC on the taxation of savings income.
The Directive enabled 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. It entered into force in 2005 and was last amended in March 2014. It was repealed following the introduction of a series of measures aimed at preventing tax evasion, and because of developments that are to usher in automatic tax information exchange.
In December 2014, the Council adopted Directive 2014/107/EU, which brings interest, dividends, gross proceeds from the sale of financial assets and other income, and account balances within the scope of the automatic exchange of information between member states. The Directive provides for the implementation of the single global standard on the automatic exchange of information developed by the Organisation for Economic Cooperation and Development (OECD).
It will enter into force on January 1, 2016, and member states will begin exchanging the information required by the end of September 2017. Austria will apply the Directive a year later than other EU member states.
Last month, the EU reached an agreement with Liechtenstein that will see the bloc and the territory automatically exchange information on their residents' financial accounts from 2017. Comparable deals have been negotiated with Andorra and Switzerland and initialled with San Marino. Negotiations are being finalized with Monaco.
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