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EU Member States Agree to Automatic Exchange of Cross-Border Tax Rulings — Orbitax Tax News & Alerts

On 6 October 2015, the Council of the European Union announced that Member States have agreed to a directive for the automatic exchange of advance cross-border tax rulings and advance pricing agreements (APA). The automatic exchange of rulings was proposed by the European Commission in March 2015 as part of a tax transparency package. Similar measures are also covered under the final report for Action 5 of the BEPS Project, which was released 5 October 2015 ({News-2015-10-06/A/2- previous coverage}). The directive will amend the text of Directive 2011/16/EU on administrative cooperation in the field of taxation.

Under the new EU rules, national tax authorities will be required to send a report to all other Member States every six months on all advance cross-border tax rulings and APAs issued. Member States may then request additional information on particular rulings/APAs as needed.

The rules are to apply from 1 January 2017. For rulings and APAs issued prior to that date, the following rules will apply:

  • Rulings and APAs issued, amended or renewed between 1 January 2012 and 31 December 2013 should be exchanged if still valid on 1 January 2014;
  • Rulings and APAs issued, amended or renewed between 1 January 2014 and 31 December 2016 should be exchanged whether still valid or not; and
  • Member States will have the option to exclude information on rulings or APAs issued, amended or renewed before 1 April 2016 if the annual net revenue of the relevant group is less than EUR 40 million.

The directive will be adopted at an upcoming Council meeting, once the European Parliament has given its opinion and it has been finalized in all official languages. EU Member States will need to transpose the new rules into domestic law before the end of 2016.