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The Irish Revenue has released a new brief detailing the impact on Irish paying agents of the European Union's decision to replace the Savings Tax Directive with legislation providing for the automatic exchange of tax information.
On November 10, the European Council repealed Directive 2003/48/EC on the taxation of savings income (EUSD). The Directive enabled interest payments made in one EU member state to residents of other member states to be taxed in accordance with the laws of the state of residence.
In December 2014, the Council adopted Directive 2014/107/EU to usher in automatic information exchange between EU member states and third countries. This Directive also 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 Directives is intended to support the implementation of the single global standard on the automatic exchange of information developed by the Organisation for Economic Cooperation and Development, the Common Reporting Standard (CRS).
The new Directive 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 the other member states.
The Irish Revenue said reporting under the savings tax directive is still required in respect of interest payments made in 2015. The final EUSD reports relating to individuals resident in other member states are due to be filed with Revenue by March 31, 2016.
Reporting to the Revenue under Directive 2014/107/EU by Irish financial institutions will commence in 2017. Information relating to non-resident account holders and their accounts must be filed with the Revenue for exchange with partner jurisdictions. Irish financial institutions must commence due diligence procedures to identify account holders who are resident in other countries from January 1, 2016.
New financial reporting requirements for non-EU countries will be introduced under the Common Reporting Standard (CRS) from January 1, 2016, with the first information exchanges due in 2017.
The Revenue explained that Ireland will cease the operation of bilateral exchange agreements with Jersey and Guernsey for interest payments made on or after January 1, 2016. Paying agents will no longer be required to report information under these agreements once their 2015 returns are filed. Future information exchanges between Ireland and these jurisdictions will take place under the CRS.
The Revenue said that discussions are ongoing regarding Ireland's remaining bilateral agreements with certain dependent territories of the UK and the Netherlands.
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