The EC repeals savings taxation directive
The Council of European Union has revoked Directive 2003/48/EC, which has allowed tax administrations better access to information on private savers since 2005. By revoking the directive, which is part of a tax transparency package presented by the Commission in March this year, the Council says it strengthens measures to prevent tax evasion.
The directive required the automatic exchange of information between member states on private savings income. This 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.
The directive was last amended in March last year to reflect changes to savings products and developments in investor behaviour since it came into force this year.
In December last year, the Council adopted directive 2014/107/EU amending provisions on the mandatory automatic exchange of information between tax administrations. It extended the scope of that exchange to include interest, dividends and other types of income.
Directive 2014/107/EU is generally broader in scope than directive 2003/48/EC. It provides that in cases of overlap of scope, directive 2014/107/EU is to prevail and will come into force on January 1st next year.
It also implements a single global standard developed by the OECD for the automatic exchange of information. The OECD standard was endorsed by G20 finance ministers in September last year. EU agreements with Andorra, Liechtenstein, Monaco, San Marino and Switzerland, initially based on directive 2003/48/EC, are currently being revised to be aligned with directive 2014/107/EU and the new global standard.