On 6 December 2016, the Council adopted a directive granting access for tax authorities to information held by authorities responsible for the prevention of money laundering.
The directive will require member states to provide access to information on the beneficial ownership of companies. It will enable tax authorities to access that information in monitoring the proper application of rules on the automatic exchange of tax information.
It will thus help prevent tax evasion and tax fraud.
The directive will apply as from 1 January 2018. It is one of a number of measures set out by the Commission in July 2016, in the wake of the April 2016 Panama Papers revelations.
The EU has made significant progress in recent years to enhance tax transparency and strengthen cooperation between the member states’ tax authorities. Recent amendments to anti-money-laundering legislation recognise the links between money laundering and tax evasion, as well as the challenges faced in prevention.
Media leaks such as the Panama Papers, revealing large-scale concealment of offshore funds, have highlighted areas where further measures need to be taken. The transparency framework must be further reinforced at both EU and international levels.
Automatic exchange of information
In particular, tax authorities need greater access to information on the beneficial ownership of intermediary entities and other relevant customer due diligence information.
Provisions on the automatic exchange of tax information are set out by directive 2014/107/EU.
Where a financial account holder is an intermediary structure, banks are required to look through that entity and report its beneficial ownership. Applying that provision relies on information held by authorities responsible for the prevention of money laundering, pursuant to directive 2015/849/EU.
Access to that information will ensure that tax authorities are better equipped to fulfil their monitoring obligations under directive 2014/107/EU.
Adoption and implementation
The directive was adopted at a meeting of the Economic and Financial Affairs Council, without discussion. The European Parliament has gave its opinion on 22 November 2016.
Member states will have until 31 December 2017 to transpose the directive into national laws and regulations