On December 8, 2015 the Council of the European Union issued a press release announcing that on that same date it adopted a Directive aimed at improving transparency on tax rulings given by Member States to companies.

According to the press release the Directive will require Member States to exchange information automatically on advance cross-border tax rulings, as well as advance pricing arrangements. The press release furthermore states that Member States receiving the information will be able to request further information where appropriate. 

The press release furthermore states that the Directive enables the European Commission to develop a secure central directory, where the information exchanged would be stored. According to the press release the directory will be accessible to all Member States and, to the extent that it is required for monitoring the correct implementation of the Directive, to the European Commission.

The new rules will be applied from January 1, 2017. In the meantime, existing obligations for Member States to exchange information will stay in place.

Concerning rulings issued before January 1, 2017 the following rules will apply: 

·        If advance cross-border rulings and advance pricing arrangements are issued, amended or renewed between January 1, 2012 and December 31, 2013, such communication shall take place under the condition that they are still valid on January 1, 2014.

·        If advance cross-border rulings and advance pricing arrangements are issued, amended or renewed between January 1, 2014 and December 31, 2016, such communication shall take place irrespectively of whether they are still valid or not.

·        Member States will have the possibility (not an obligation) to exclude from information exchange advance tax rulings and pricing arrangements issued to companies with an annual net turnover of less than €40 million at a group level, if such advance cross-border rulings and advance pricing arrangements were issued, amended or renewed before April 1, 2016.  However, this exemption will not apply to companies conducting mainly financial or investment activities.

Click here to be forwarded to the Directive adopted by the Council on December 8, 2015 as available on the website of the European Council/Council of the European Union, which will open in a new window.

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