Council Directive (EU) 2023/2226 of 17 October 2023

What it is

to improve the existing EU framework for exchange of information and administrative cooperation in the field of tax matters. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: fair taxation is one of the main foundations of the European social market economy. The COVID-19 pandemic and the consequences of Russia's war of aggression against Ukraine add to the urgency to protect public finances. In this context, it has become more important than ever to ensure tax fairness by preventing tax fraud, tax evasion and tax avoidance. The emergence of alternative means of payment and investment, such as crypto-assets and e-money , threatens to undermine the progress made in tax transparency in recent years and presents significant risks of tax evasion. In recent years, many improvements have been made in the area of information exchange, through a number of amendments to the Administrative Cooperation Directive. The Committee on Economic and Monetary Affairs adopted, in the framework of a special legislative procedure (Parliament’s consultation), the report by Rasmus ANDRESEN (Greens/EFA, DE) on the proposal for a Council directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation. The committee called on the European Parliament to approve the Commission proposal as amended below. Scope and conditions of mandatory automatic exchange of information A new paragraph is included specifying that automatic exchange of information should be deemed to be complied with, where competent authorities of any other Member States can access such information either through the national registries or data retrieval systems or interconnected registries as provided for in a proposal for a directive of the European Parliament and of the Council on the mechanisms to be put in place by the Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. Members proposed that the competent authority should not negotiate and agree new cross-border bilateral or multilateral advance pricing arrangements with third countries that do not permit their disclosure to competent authorities of other Member States as from 1 January 2026. The competent authority of the Member State where the country-by-country report was received should also communicate that report to the competent services of the Commission, which is responsible for the centralised register of country-by-country reports. The Commission should publish anonymised and aggregated country-by-country report statistics on an annual basis for all Member States. Due to their opaque and volatile nature, crypto-assets could be used for illicit purposes. Therefore, additional categories of assets and income, such as crypto-assets, should now be covered according to the report. Member States should communicate to the Commission any relevant information necessary for the evaluation of the effectiveness of administrative cooperation in accordance with this Directive in combating tax evasion and tax avoidance and they…

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