On November 8, 2016 the Council of the European Union issued a press release announcing that the Economic and Financial Affairs Council (ECOFIN) has agreed on a general approach without discussion on a proposal for a Directive that would grant access for tax authorities to information held by authorities with responsibility for the prevention of money laundering. According to the press release, access would be specifically granted to information on the beneficial ownership of companies. It is furthermore stated that the Directive will apply as from January 1, 2018.

Unfortunately no text of this agreed general approach agreed upon or of the Directive itself was attached to the press release. In the press release a.o. the following is stated:

“The proposal 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….

… In particular, tax authorities need greater access to information on the beneficial ownership of intermediary entitiesand other relevant customer due diligence information. The directive will enable them to access that information in monitoring the proper application of rules on the automatic exchange of tax information.

Where a financial account holder is an intermediary structure, financial institutions are required by directive 2014/107/EU 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. It will thus help prevent tax evasion and tax fraud.”

On July 5, 2016, the European Commission set out the next steps in its campaign to boost tax transparency in order to fight tax evasion and avoidance in the European Union. The proposals made by the European Commission  included a proposal for a Council Directive amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities. Since unfortunately no text of the Directive agreed upon was attached to the press release it is not clear whether the proposal of the European Commission was agreed upon without any amendments made.

Next steps

With respect to the next steps the press release as issued by the Council of the European Union states the following:

“Agreement was reached at a meeting of the Economic and Financial Affairs Council, without discussion. The Council will adopt the directive once the European Parliament has given its opinion.

The directive requires unanimity within the Council, after consulting the Parliament. (Legal basis: articles 113 and 115 of the Treaty on the Functioning of the European Union.)

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