Automatic Exchange Of Information of Tax Rulings

In line with its agenda aiming to combat tax evasion or “aggressive” forms of tax planning, the European Commission (the “Commission”) presented a first tax transparency package on 18 March 2015, which includes a proposal for a mandatory automatic exchange of information regarding advance cross-border rulings and advance pricing agreements (the “Rulings”).

The Commission is of the opinion that a lack of transparency regarding advance tax rulings may have an impact on other countries which have links with the beneficiaries of the advance tax rulings and thus jeopardise the functioning of the internal market.

As a first step, the proposal provides that a basic set of information has to be provided to all EU Member States, which englobes the following:

  • the identification of the taxpayer and where appropriate the group of companies to which it belongs;
  • the content of the Rulings, including a description of the relevant business activities or transactions or series of transactions;
  • the identification of the other Member States likely to be directly or indirectly concerned by the Rulings;
  • the identification of any person, other than a natural person, in the other Member State likely to be directly or indirectly affected.

As a second step, the Member States that can demonstrate that additional information is foreseeably relevant to them can request further information under the existing provisions of the Directive 2011/16/EU, to be amended (the “Directive”).

A new Article 8a in the Directive will lay down the conditions and the scope for the mandatory exchange of information on Rulings. The obligation is intended to be retroactive, extending to Rulings issued within a ten-year period (and that are still valid on the date of entry into force of the Directive) prior to the date on which the amended Directive takes effect.

A possible creation of a secure central directory accessible by all Member States and the Commission, concerning the communicated information is foreseen.

The Commission aims at a first exchange of information in January 2016.