DAC vs EUSD - Conceding the battle to win the war (against tax evasion)?
On 24 March 2014, after a six-year discussion on how to close existing loopholes in the current text of the EU Savings Directive and prevent tax evasion more effectively, the EU Council of Ministers finally adopted a roadened version of the EU Savings Directive (EUSD). The amended EUSD was however destined to be short-lived, as the intended repeal of the EUSD was announced in October 2014.
In the meantime, OECD member countries (including EU member states) had endorsed the Common Reporting Standard (CRS) for implementing the automatic exchange of information in tax matters. Any concerns over potentially lengthy discussions at EU level to implement the CRS in the European Union were also quickly put to rest through an extension of the Directive on Administrative Cooperation (DAC) during the ECOFIN meeting in October 2014. The revised DAC (including the CRS requirements on mandatory automatic exchange of information) was approved shortly thereafter, on 9 December 2014. The speed of the process mainly stems from the fact that the CRS was inspired by the FATCA Model 1 Intergovernmental Agreements (Model 1 IGAs) signed by many countries worldwide (including most EU member states) with the United States. The move towards tax transparency that accelerated sharply after the financial crisis now seems to have become a reality on a virtually global basis.
Performance magazine issue 17, May 2015
Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.