Council Directive (EU) 2015/2060 of 10 November 2015

What it is

to repeal Council Directive 2003/48/EC on the taxation of savings income. PROPOSED ACT: Regulation of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: in 2003, the Council adopted Directive 2003/48/EC on the taxation of savings income received in the form of interest payments (the Savings Directive). This Directive served two main purposes: (i) avoiding distortions to the movement of capital and (ii) allowing effective taxation of interest payments made from paying agents established in one Member State to individuals resident in another Member State. The Committee on Economic and Monetary Affairs adopted, in the framework of a special legislative procedure (Parliament’s consultation), the report by Molly SCOTT CATO (Greens/ALE, UK) on the proposal for a Council directive repealing Council Directive 2003/48/EC on taxation of savings income in the form of interest payments. The committee approved the Commission proposal subject to amendment introduced in the form of recitals. Whilst supporting the proposal to repeal the Directive, Members expressed their concern about the potential for the creation of loopholes if the separate bilateral agreements between the Union and five European countries that are not Member States of the Union (Switzerland, Liechtenstein, San Marino, Monaco and Andorra) are not rapidly concluded. They also regretted that the Commission does not have a mandate to negotiate with the 12 dependent or associated territories (the Channel Islands, the Isle of Man and the dependent or associated territories in the Caribbean). Members consider it important that the Commission continues to monitor that the repeal does not create loopholes . The report proposed that the Commission shall: by 1 July 2016, submit a report to the Council and to the European Parliament on the transition of moving from the reporting standard applied under Directive 2003/48/EC to the new reporting standard established by Directive 2014/107/EU ; by 1 October 2017, submit a follow-up report in order to closely monitor the situation. The reports shall, where appropriate, be accompanied by legislative proposals. The European Parliament adopted by 629 votes to 30, with 29 abstentions, in the framework of a special legislative procedure (Parliament’s consultation), a legislative resolution on the proposal for a Council directive repealing Council Directive 2003/48/EC on taxation of savings income in the form of interest payments. Parliament approved the Commission proposal subject to amendment introduced in the form of recitals. Given that all of the bilateral agreements are adapted to the new OECD Global Standard and to Directive 2014/107/EU , Parliament expressed its concern about the potential for the creation of loopholes if the separate bilateral agreements between the Union and five European countries that are not Member States of the Union (Switzerland, Liechtenstein, San Marino, Monaco and Andorra) are not rapidly concluded. It also regretted that the Commission does not have a mandate to…

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