The EU executive geared up to accelerate the fight against tax fraud on Wednesday by widening the data automatically exchanged between EU tax administrations to cover income such as dividends and capital gains.
Brussels: The EU executive geared up to accelerate the fight against tax fraud on Wednesday by widening the data automatically exchanged between EU tax administrations to cover income such as dividends and capital gains.
If the European Commission proposals are agreed, this would give the EU "the most comprehensive information exchange system in the world for taxation," said the bloc`s Taxation Commissioner Algirdas Semeta.
"This will strengthen our weapons to attack tax evasion within the EU (and) ... will place us in an optimal position to seek similar transparency from our international partners," he said.
The plans, also to be outlined at a G8 summit next week, would see European Union states sharing as much information among themselves as they have committed to do with the United States under its Foreign Account Tax Compliance Act, or FATCA.
Lost tax is estimated to cost the 27-nation bloc as much as a trillion euros a year and as recession bites across the EU the battle against fraud and evasion has crept up the political agenda.
Wednesday`s measures would complete two pieces of existing legislation providing for automatic information sharing.
The first is a 2005 law to provide data on the savings of non-residents to their tax authorities that was blocked by banking haven nations Luxembourg and Austria -- the EU Savings Tax Directive.
EU leaders agreed last month to undo banking secrecy by the end of the year end and extend data exchange to investment funds and payments through trusts.
The second boosts the scope of a new information sharing deal -- the Administrative Cooperation Directive -- allowing for the automatic exchange of information on income, director`s fees, life insurance, pensions and immovable property from 2015.
Under Wednesday`s proposal, data sharing would be extended to also cover dividends, capital gains and other financial earnings.
"The automatic exchange of information must become the global standard and the EU will do everything it can to ensure this," Semeta said.
In April, five EU nations -- Britain, France, Germany, Italy, Spain -- set up a "pilot multilateral exchange facility" to share the same type of information among themselves that they already share with the United States under FATCA, which dates to 2010.
Twelve other EU nations have since joined. Semeta said that by combining the two strengthened laws as suggested by the Commission, "we will have a European FATCA."