Council Directive (EU) 2015/2376 of 8 December 2015

What it is

to ensure the mandatory automatic exchange of information between tax administrations regarding advance cross-border rulings and advance pricing arrangements. ROLEOF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: the challenge posed by cross-border tax avoidance, aggressive tax planning and harmful tax competition has increased considerably and has become a major focus of concern within the Union and at global level. In particular, rulings concerning tax-driven structures lead to a low level of taxation of artificially high amounts of income in the country giving the advance ruling and may leave artificially low amounts of income to be taxed in any other countries involved. An increase in transparency is therefore urgently required. The tools and mechanisms established by Council Directive 2011/16/EU need to be enhanced in order to achieve this. In its resolution of 21 May 2013 , the European Parliament emphasised that the EU should take a leading role in global discussions on the fight against tax fraud, tax avoidance and tax havens, in particular in relation to promoting the exchange of information. The Committee on Economic and Monetary Affairs adopted, in the framework of a special legislative procedure (Parliament’s consultation), the report by Markus FERBER (EPP, DE) on the proposal for a Council directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation. The committee called on the European Parliament to approve the Commission proposal as amended. The report noted that following the LuxLeaks scandal and by means of this report, the European Parliament expresses its strong determination not to tolerate tax fraud and tax avoidance as well as to advocate for a fair distribution of the tax burden between citizens and companies. The main amendments made to the proposal concern the following issues: Limited scope of the exchange of information : Members rejected the limited the scope of mandatory exchange of information to cross-border tax rulings and transfer pricing arrangements. They considered that the Directive should apply to all tax rulings and not just cross border rulings and advance pricing arrangements, given that purely national transactions can also have cross-border effects. That is particularly true of cascade transactions, where the advance tax ruling or price arrangement concerns the first national transactions, without taking into consideration the next (cross-border) transactions. Quicker exchanges : Members proposed that information should be exchanged immediately , and at the latest one month after the advance rulings or advance pricing arrangements have been issued or amended. Secure central directory and transparency : on 31 December 2016 at the latest, the Commission shall develop a secure central directory where information to be communicated in the framework of this Directive must be recorded in order to satisfy the automatic exchange of information. Member States shall ensure that all information communicated during the transitional period…

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