• 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.

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now