Friday, November 15, 2013
Plans to amend the Savings Tax Directive were set to be tabled at the November 15 meeting of the European Union Council of Economic and Finance Ministers, with the aim of reaching a political agreement.
The European Commission's proposal is designed to close loopholes and promote the proper functioning of the current legislation. The Directive requires paying agents to report interest income received by taxpayers resident in other EU member states. Three member states have been allowed to levy a transitional withholding tax on such income.
The Commission has been pressing for reform since 2008. It wants to better ensure the taxation of interest payments which are channelled through immediate tax-exempt structures, such as trusts and foundations. It also wants to extend the scope of the Directive, to encompass income equivalent to interest obtained through investments in certain innovative financial products.
In addition to discussing the Directive, ECOFIN was to consider the Commission's recommendation for a standard value-added tax (VAT) declaration for all EU member states. It hopes to introduce a uniform set of filing requirements for businesses, regardless of the member state in which they file. The standard return would replace national VAT returns. The Commission estimates that, as a result of the changes, EU businesses could save up to EUR15bn (USD20.2bn) a year.