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EU Commission Adopts Proposal to Strengthen Transparency and Announces Related Plans — Orbitax Tax News & Alerts

On 5 July 2016, the European Commission adopted proposed transparency rules concerning terrorism financing, tax avoidance and money laundering. The proposed changes regarding tax avoidance and money laundering would involve amendments to the Fourth Anti-Money Laundering Directive (Directive (EU) 2015/849/EU) and the Administrative Directive (Directive 2011/16/EU). These include:

  • Full public access to the beneficial ownership registers: Member States will make public certain information of the beneficial ownership registers on companies and business-related trusts. Information on all other trusts will be included in the national registers and available to parties who can show a legitimate interest. The beneficial owners who have 10% ownership in certain companies that present a risk of being used for money laundering and tax evasion will be included in the registries. The threshold remains at 25% for all other companies.
  • Interconnection of the registers: the proposal provides for the direct interconnection of the registers to facilitate cooperation between EU Member States.
  • Extending the information available to authorities: The Commission has proposed that existing, as well as new, accounts should be subject to due diligence controls. This will prevent accounts that are potentially used for illicit activities from escaping detection. Passive companies and trusts, such as those highlighted in the Panama Papers, will also be subject to greater scrutiny and tighter rules.

On the same date, the Commission also announced its plans to boost tax transparency in order to fight tax evasion and avoidance in the EU, which includes the propose rules above and certain other actions.

Click the following link for the Commission press release on the adopted proposals and the press release on the plans to boost tax transparency for additional information.