Administrative cooperation in the field of taxation

Outline of the Community (European Union) legislation about Administrative cooperation in the field of taxation

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

Administrative cooperation in the field of taxation

Document or Iniciative

Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC.

Summary

This directive repeals Directive 77/799/EEC and establishes new rules and procedures for the cooperation between European Union (EU) countries with a view to exchanging information that is relevant to the administration and enforcement of national laws in the field of taxation. It applies to all taxes except the following:

• value added tax (VAT) and customs duties, or excise duties covered by other EU legislation on administrative cooperation between EU countries;
• compulsory social security contributions payable to the EU country;
• fees, such as for certificates and other documents issued by public authorities;
• dues of a contractual nature, such as consideration for public utilities.

In accordance with this directive, on 17 June 2011 the Commission published a list of the EU countries’ competent national authorities in the Official Journal. The competent authority must designate a single central liaison office which is responsible for contacts with other EU countries in the field of administrative cooperation and may be responsible for contacts with the Commission. The competent authority may also designate liaison departments and competent officials with competences assigned according to national legislation or policy. Where a liaison department or a competent official receives a request for cooperation requiring action which is outside their area of competence, they must immediately send such a request to their country’s central liaison office and inform the requesting authority thereof.

EXCHANGE OF INFORMATION

Exchange of information on request

The requested authority must, at the request of the requesting authority, communicate any relevant information that it has in its possession or that it obtains from administrative enquiries. In order to obtain the requested information or to conduct the administrative enquiry requested, the requested authority must follow the same procedures as it would when acting on its own initiative or at the request of another authority in its own EU country. EU countries may not refuse to supply information solely because this information is held by a bank or other type of financial institution.

The requested authority must confirm receipt of the request within seven working days and must then provide the information as quickly as possible, and no later than six months after receipt of the request. If, however, the requested authority already possesses the information, it must be provided within two months of that date.

Mandatory automatic exchange of information

Each competent national authority must send to the competent authority of any other EU country, by automatic exchange, available information concerning taxable periods as from 1 January 2014 relating to residents in that other EU country on the following categories of income and capital:

• income from employment;
• director’s fees;
• life insurance products not covered by other EU legal instruments on exchange of information and other such measures;
• pensions;
• ownership of and income from immovable property.

Spontaneous exchange of information

Each competent national authority must communicate information to the competent authority of any other EU country in the following situations:

• the competent authority of one EU country has reason to suppose that there may be a loss of tax in the other EU country;
• a person liable to tax obtains a reduction in, or an exemption from, tax in one EU country which would give rise to an increase in tax or to liability to tax in the other EU country;
• business dealings between two persons liable to tax in different EU countries are conducted through one or more countries in such a way that a saving in tax may result in either or both of the EU countries;
• the competent authority of one EU country has grounds for supposing that a saving of tax may result from artificial transfers of profits within groups of enterprises;
• information forwarded to one EU country by another EU country’s competent authority has enabled information to be obtained which may be relevant in assessing liability to tax in the latter EU country.

Feedback

If requested, the competent authority which has received information has to send feedback to the sending country as soon as possible and no later than three months after the outcome of the use of the requested information is known.

OTHER FORMS OF ADMINISTRATIVE COOPERATION

Other forms of administrative cooperation include:

• by agreement between the requesting authority and the requested authority, officials authorised by the requesting authority may be present in administrative offices and may participate in administrative enquiries in the requested country;
• simultaneous controls of persons of common or complementary interest between two or more EU countries, with a view to exchanging the information obtained;
• administrative notification;
• sharing of best practices and experience to improve cooperation.

Any information communicated between EU countries in accordance with this directive is covered by the obligation of official secrecy and benefits from the protection extended to similar information under the national law of the EU country which received it. This information may be used in the following instances:

• for the assessment and enforcement of other taxes and duties covered by Directive 2010/24/EU;
• for the assessment and enforcement of compulsory social security contributions;
• in judicial and administrative proceedings resulting from tax law infringements.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Directive 2011/16/EU	11.3.2011	1.1.2013 Article 8: 1.1.2015	OJ L 64, 11.3.2011