EU Commission Urges Member States To Improve The Way How To Collect And Exploit Data Exchange

; posted on
December 18th, 2018

On 17 December 2018, the European Commission presented the first report on the overview and assessment of the statistics and information on the automatic exchanges in the field of direct taxation. The European Commission through the report urges Members States to improve the way they collect and exploit the data they exchange.

Automatic Exchange of Information (AEOI) by Statistics

According to the report, EU transparency rules led to Member States compiling and sharing data from 8.7 million financial accounts with a total value of EUR 2,900 billion in 2017. Moreover, Member States also exchanged information concerning nearly 16 million taxpayers, related to incomes and capital amounting to over EUR 120 billion.

The report revealed that the AEOI programme increased the transparency of information on advance tax rulings and advance pricing arrangements. Almost 18,000 rulings were recorded in the central directory in 2017 compared to hardly any being spontaneously exchanged in the years up to 2015.

The Way Forward

Even though statistically AEOI shows a positive trend in exchanging information, the commission pointed out that several Member States still make very limited use of the information they receive. Therefore, as way forward, the commission through the report urges Member States to make better use of data received via AEOI by implementing the following strategy:

  • Develop a common methodology to estimate the benefits of AEOI reliably and comprehensively.
  • Ensure AEOI information is part of the tax risk management cycle and that it is used more for awareness campaign to improve voluntary compliance as well as for audits, combining all AEOI flows together as well as information obtained nationally and received via other means of administrative cooperation (e.g. simultaneous controls, presences in other tax administrations during enquiries and through exchange of information on request and spontaneously).
  • Share knowledge of best practices for full and efficient use of the data, for example by using advanced analytics techniques, such as data mining.

The commission also requires Member States to review the quality of the information they collected and provide feedback to the entities (e.g. financial institutions) which supply information for AEOI. As such, the AEOI programme will be more effective and efficient.

The EU Fiscalis programme for tax cooperation can provide support for both improving AEOI data quality and making sure information exchanged is used efficiently and effectively to create a fairer tax system for the benefit of Europe and its citizens.

Source: European Commission

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