(1)

In recent years, the challenge posed by tax fraud and tax evasion has increased considerably and has become a major focus of concern within the Union and at global level. Unreported and untaxed income is considerably reducing national tax revenues. An increase in the efficiency and effectiveness of tax collection is therefore urgently needed. The automatic exchange of information constitutes an important tool in this regard and the Commission in its Communication of 6 December 2012 containing an Action plan to strengthen the fight against tax fraud and tax evasion (8) highlighted the need to promote vigorously the automatic exchange of information as the future European and international standard for transparency and exchange of information in tax matters. The European Council on 22 May 2013 requested the extension of automatic information exchange at Union and global levels with a view to combatting tax fraud, tax evasion and aggressive tax planning.

(1)

In recent years, the challenge posed by tax fraud, tax evasion and aggressive tax planning has increased considerably and has become a major focus of concern within the Union and at global level , especially in times of crisis . Unreported and untaxed income is considerably reducing national tax revenues , creating conditions for unfair competition and leading to losses . An increase in the efficiency and effectiveness of tax collection is therefore urgently needed. There should be effective systems in place to improve the efficiency of tax collection and to determine which Member State’s tax law is applicable. The automatic exchange of information constitutes an important tool in this regard and the Commission in its Communication of 6 December 2012 containing an Action plan to strengthen the fight against tax fraud and tax evasion (8) highlighted the need to promote vigorously the automatic exchange of information as the future European and international standard for transparency and exchange of information in tax matters. The European Parliament, in its resolution of 21 May 2013 on Fight against Tax Fraud, Tax Evasion and Tax Havens  (9) , and the European Council on 22 May 2013, requested the extension of automatic information exchange at Union and global levels with a view to combatting tax fraud, tax evasion and aggressive tax planning.

(1a)

In the past, tax policy was seen as an exclusively national matter, in which the Union does not matter. Today, tax must be as a result of globalisation, also discussed at the Union level. It would be more efficient and effective for the Commission to coordinate the exchange of information on tax on behalf of Member States than have a series of bilateral agreements between Member States. Different standards for automatic exchange of information vary from country to country. This is unnecessarily complex and imposes unnecessarily high costs for both Member States and financial institutions within the Union.

(1b)

(3)

As highlighted by the request of the European Council, it is appropriate to bring forward the extension of automatic information exchange already envisaged in Article 8(5) of Directive 2011/16/EU. A Union initiative ensures a coherent, consistent and comprehensive Union-wide approach to the automatic exchange of information in the internal market which would lead to cost savings both for tax administrations and economic operators .

(3)

As highlighted by the request of the European Council, it is appropriate to bring forward the extension of automatic information exchange already envisaged in Article 8(5) of Directive 2011/16/EU. A Union initiative ensures a coherent, consistent and comprehensive Union-wide approach to the automatic exchange of information in the internal market and is important in order to improve the efficiency of the tax systems and to strengthen the internal market in which the co-existence of 28 national tax systems raises issues of double taxation and distortion of competition. Not only would Member States benefit from the exchange of information on an equal footing, but the Union would be able to take the lead to promote similar standards internationally.

(3a)

Member States should implement administrative cooperation and exchange of information that does not violate taxpayers' procedural rights or their right to privacy.

(3b)

In accordance with the OECD report of 19 June 2013 and the St Petersburg G20 Leaders’ Declaration of 6 September 2013, the automatic exchange of information should be based on a common global model which ensures adequate confidentiality and the proper use of information exchanged. Expanding the scope of the automatic exchange of tax information will be the Union’s contribution to the work of the OECD and should increase the probability of a coherent global system, based on the new OECD standard to be presented in February 2014.

(3c)

When data is submitted to the tax authorities for the purpose of information exchange with other countries, it is important to clarify how those authorities may use that data.

(4a)

In order to reduce ambiguities and inconsistencies, and to achieve cost savings, it is essential that the implementation of this Directive is coordinated with the implementation of FATCA.

(5)

The conclusion of parallel and uncoordinated agreements by Member States under Article 19 of Directive 2011/16/EU would lead to distortions that would be detrimental to the smooth functioning of the internal Market. Expanded automatic information exchange on the basis of a Union-wide legislative instrument would remove the need for Member States to invoke that provision, with a view to concluding bilateral or multilateral agreements that may be considered appropriate on the same subject in the absence of relevant Union legislation.

(5)

The conclusion of parallel and uncoordinated agreements by Member States under Article 19 of Directive 2011/16/EU would lead to distortions that would be detrimental to the smooth functioning of the internal Market and to the Union approach as a whole . Expanded automatic information exchange on the basis of a Union-wide legislative instrument would remove the need for Member States to invoke that provision, with a view to concluding bilateral or multilateral agreements that may be considered appropriate on the same subject in the absence of relevant Union legislation. Therefore, the Union would also be in a better negotiating position to push for higher standards of tax information exchange at a global level.

(5a)

Work is in progress under the auspices of the OECD to develop bilateral and multilateral model agreements on exchanging information. Negotiations are also being held between the USA and many other countries on the implementation of FATCA by means of bilateral agreements. Many of the proposed amendments to Directive 2011/16/EU on administrative cooperation in the field of taxation regulate the same information exchange with which FATCA and the work at the OECD are concerned. The Commission should clarify the relationship between those regulatory provisions in order to ensure that the national tax authorities and the financial institutions responsible for applying those amendments are able to implement them.

(6a)

The new categories of income and capital in respect of which this Directive introduces an obligation to exchange information should be established in accordance with their interpretation in the law of the Member State communicating the information.

(7a)

The purpose of the existing provision of information to national tax authorities on income from capital and services is, inter alia, to provide a basis for taxation and for exchanges of information with other countries. If the requirement to provide information is now altered and information is obtained purely for the purpose of exchanging it, it is important to make it clear how the national tax authorities are permitted to use that information.

(9a)

Each Member State should lay down penalties for breaches of this Directive and should take appropriate measures to ensure compliance therewith.

(10)

This Directive respects the fundamental rights and observes the principles which are recognised in particular by the Charter of Fundamental Rights of the European Union.

(10)

This Directive respects the fundamental rights and observes the principles which are recognised in particular in Article 16 of the Treaty on the Functioning of the European Union and in Article 8 of the Charter of Fundamental Rights of the European Union. In light of the sensitivity of the data to be collected, specific attention should be paid to the respect for the right to privacy and to legitimate claims of confidentiality, in particular during any inquiry process.

(ba)

Paragraph 4 is replaced by the following:

‘(ca)

make available the human, technological and financial resources needed for the implementation of this Directive, given the amount and the complexity of information, subject to the automatic exchange starting on 1 January 2015.’