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Commissioner responsible for Taxation and Customs Union, Statistics, Audit and Anti-fraud
Fighting tax evasion: proposal to widen scope of automatic exchange of information within the EU
Brussels, 12 June 2013
Ladies and Gentlemen
In the run up to the G8 Summit, which has put tax compliance at the heart of its agenda, the proposal I present to you today is both timely and pertinent.
It will reinforce two important pillars of tax good governance within the EU: transparency and information exchange.
In doing so, it will strengthen our weapons to attack tax evasion within the EU.
And it will place us in an optimal position to seek similar transparency from our international partners.
What the Commission has proposed today is to expand the automatic exchange of information between EU tax authorities.
And to do so quickly.
From January 2015, dividends, capital gains, all other financial income and account balances should be added to the already extensive list of categories subject to the automatic exchange of information.
With this move, the EU will have the most comprehensive information exchange system in the world for taxation.
At first glance, this might seem to be a purely technical adjustment to administrative cooperation rules.
However, it is of far greater significance than that.
Let me explain to you why.
Improved fight against evasion
First, we know that the automatic exchange of information gives Member States access to essential information on the income earned by their residents abroad.
As such, it allows the fair taxation of this income in line with national rules.
Obviously, the wider the scope of automatic information exchange, the more effective it is.
And the equal treatment of all income types reduces the possibility for circumvention by evaders.
Therefore, today's proposal to substantially expand automatic information exchange offers a major step forward in the EU's fight against evasion.
Second, as you are no doubt aware, the FATCA rule will oblige Member States, from next year, to transfer extensive data to the US authorities on the accounts of US citizens in their territory.
Under EU law, we have a "most favoured nation clause", to ensure that Member States share as much information with each other as they do with any non-EU country.
However, nobody wants a situation whereby this clause has to be invoked by one Member State after another, as FATCA agreements are implemented.
By ensuring that automatic exchange of information within the EU matches – and even goes further than – FATCA, today's proposal will prevent such a contentious situation from arising.
Many Member States had expressed a desire to do this under a "pilot project" of bilateral and multilateral exchange agreements.
However, I firmly believe that an EU approach is better than a patchwork of bilateral arrangements.
It prevents loopholes from emerging, creates greater legal certainty and ensures that all Member States benefit from an inclusive stance against tax evasion.
Finally – and significantly as we approach the G8 Summit – today's proposal gives the EU an even stronger hand to push for more tax good governance internationally.
It is a signal that we are prepared to "up our game" as a Union, and lead by example.
And it is also a signal that we expect others to follow us.
The automatic exchange of information must become the global standard, and the EU will do everything it can to ensure this.
Ladies and Gentlemen,
At the European Council a few weeks ago, EU leaders made expanding the scope of automatic exchange of information a priority: in the EU, and beyond.
Today, I have set the ball rolling for this to be achieved within the EU.
Next week, President Barroso will press our international partners to do the same.
As such, our fight against tax evasion continues to move forward, and we rely on the support of all Member States to maintain its pace.