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EU Leaders Reach Deal On Savings Tax Directive

by Ulrika Lomas,, Brussels

26 March 2014

After six years of negotiations, European Union (EU) member states have formally adopted a revised Savings Tax Directive, in a move described by Tax Commissioner Algirdas Šemeta as a major step forward in the fight against tax evasion.

A political agreement was reached at a March 21 meeting of the European Council, with the formal adoption following on March 24.

The Directive is designed to tackle cross-border tax evasion by creating an automatic information exchange system for tax authorities, to help identify individuals that receive savings income in a member state other than their own. The Commission has been pushing for reforms to the Directive since 2008, intended to close loopholes by extending its scope to investment funds, pensions, and innovative financial instruments. The Directive will form part of the EU's legislative structure for implementing a new global standard on the automatic exchange of information.

Šemeta said: "An important anti-evasion file has been unblocked, after years of deadlock. This is proof of the widespread acceptance that the days of bank secrecy and tax untransparency are over."

"Tax evasion undermines fiscal sustainability, fair taxation, and level competition. The loss of billions in unpaid taxes weighs heavily on the pockets of honest taxpayers. That is why the campaign against evasion has leapt to the top of everyone's political agenda over the past couple of years."

Concluding, Šemeta called for an additional push, to ensure that the plethora of anti-evasion proposals tabled by the Commission in recent years are properly implemented.

Šemeta expects "swift agreement on the Administrative Cooperation Directive to cement the widest scope of automatic exchange between our member states," and said "work to ensure that companies pay their fair share of tax – including multinational and digital ones – must maintain full pace."

TAGS: individuals | compliance | tax | investment | business | pensions | tax compliance | tax avoidance | tax incentives | investment funds | multinationals | tax planning | European Union (EU) | Europe | Tax | Tax Evasion

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