European Union notify in advance about….

21.06.2013

Since 2005, the European Union introduced a new system of automatic exchange of tax information between the competent authorities of the member countries as a new mechanism to combat tax evasion. The main documents which regulate this mechanism are: the European Union directive on administrative cooperation in the field of taxation and the European Directive on the taxation of savings. According to these documents member countries are required to provide the information about savings and income which are in the accounts in the banks. European Commission developed a plan till 2017 to expand the sphere of influence of the Directives, which will cover a greater amount of information about taxpayers to automatically exchange between countries.

At the meeting of the European Commission, which took place on 20 June 2013, to five countries-participants of the European Union was sent a warning about necessity of execution of the Administrative Cooperation Directive. Such warnings were sent to Belgium, Greece, Italy, Poland and Finland and now they have two months to comply with the requirements of the European Commission, otherwise European Commission will go with this case to the European Court of Justice.

Based on: ec.europa.eu

Expert’s opinion

If the European Union has already sent warnings to member countries with the purpose to execute directives about the introduction of a system of automatic exchange of tax information, we can conclude that the EU is serious about the question of combating tax evasion.

Let’s remember the situation with the U.S. and its resident bank accounts in Switzerland. Obviously, the EU has surpassed simple agreements between the participating countries on exchange of tax information and tries to introduce a mechanism with the possibility of rendering the above mentioned warnings in order to establish a unified system and incriminate unfair businessmen who hid accounts abroad. Thus, the EU tries to reveal everyone and correspond with the principle of banking transparency.

In any case, honest businessmen, as always, may sleep easily.

Shevchenko Anna ( Paralegal of Legal Services and Bank Consulting Department of Honest&Bright company)