Global

Details

  • Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 3/12/2014

EU - FAQs on EU Savings Taxation Directive 

March 12: The European Commission this week provided a discussion of  “frequently asked questions” (FAQs) concerning the EU Savings Taxation Directive—which aims to address cross-border tax evasion by creating an information exchange system for tax authorities to help identify individuals that receive savings income in an EU Member State other than their own.

Changes to the directive, discussed yesterday by the European Council, would enlarge the scope of the directive to include new types of savings income and products that generate interest or equivalent income (e.g., life insurance contracts as well as a broader coverage of investment funds) Tax authorities, using a "look-through" approach, would be required to take steps to identify who is benefiting from interest payments. Read the EC report [PDF 199 KB]


The core of the EU Savings Taxation Directive is the principle of automatic exchange of information. Accordingly, EU Member States collect data on the income from savings of non-resident individuals, and automatically provide this data to the authorities where the individual resides.


  • Currently, 26 EU Member States apply the automatic exchange of information.
  • Two Member States—Austria and Luxembourg—being allowed, for a transitional period, to apply a withholding tax instead of engaging in the automatic exchange of information.
  • Luxembourg announced that from 2015, it will participate in the automatic exchange of information.
  • Currently, the rate of withholding tax is 35%.
  • The EU has savings taxation agreements with five neighboring countries (Switzerland, Andorra, Monaco, Lichtenstein, and San Marino).
  • In February 2014, the G20 finance ministers endorsed elements for a new global standard for automatic exchange of information between tax administrations. The EU will align the Savings Directive with the global initiative.

Read the FAQ discussion (11 March 2014) from the European Commission.




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