Compliance of financial intermediaries in the new era of exchange of information between tax authorities

Amaddeo, Francesca (2016) Compliance of financial intermediaries in the new era of exchange of information between tax authorities. Rijeka Doctoral Conference, Book of Abstract,. pp. 1-2. ISSN 2459-7201

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This presentation deals with the compliance of financial intermediaries with their new duties regarding the exchange of information between tax authorities. The said duties continue to grow on both the international level and European level, which sometimes overlap. On the one hand, there are international instruments developed especially by the OECD, such as Tax Information Exchange Agreements (hereinafter: TIEAs), the Convention on Mutual Administrative Cooperation (hereinafter: MAAT Convention) and – the milestone – Art. 26 of the OECD Model Convention. These instruments represent different working schemes aimed at improving transparency and efficiency between fiscal authorities of different States. They all rely on financial intermediaries who are expected to give an important contribution to the development of the system of exchange of information. For instance, Art. 26(5) of the OECD Model Convention has recently been modified to introduce a specific regime for the category of economic operators. On the other hand, the European Union has introduced a new transparency policy, not only to implement international standards, but also to achieve harmonization with regard to this important issue. The first directive – the Directive 779/77/EEC – concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation (and taxation of insurance premiums) has been replaced by the Directive 2011/16/EU, known as the DAC Directive, on administrative cooperation in the field of taxation, providing a new and more efficient mechanism to grant a correct exchange of information between the Member States and tax authorities. As of 2014 the role of financial intermediaries has assumed an increased importance, so that EU institutions decided to take legislative actions. Firstly, by enacting the Savings Directive 2014/48/EU whose objectives were to ensure effective taxation of savings income in the form of cross-border interest payments which were generally included in all Member States in the taxable income of resident individuals. Subsequently, by introducing the Directive 2014/107/EU, known as the DAC 2 Directive, which amended the Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation. The latter instrument focuses on the role of financial intermediaries laying down a series of their duties which must be strictly followed and carried out correctly to grant the transmission of taxpayers’ data to the competent authorities. And finally, by adopting the Directive 2015/2376/EU whose goal is to assure mandatory automatic exchange of advance cross-border rulings and advance pricing arrangements. Moreover, the focus is put on the role of financial intermediaries, analysing their duties 2 and, overall, the way in which they face the balance needed between the taxpayers’ privacy right and the taxing power of States. This presentation forms part of a broader research aimed at studying the development and trends in the field of legal regulation of the exchange of information within EU and the international framework. By comparing different schemes, shared traits are identified as well as areas with potential for convergence. Joined in a single mechanism these parallel schemes would be more efficient. At the same time, there is a need to carefully balance the opposing interests of taxpayers to protect their privacy right and the States to strengthen their taxing powers of States.

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