Europe: EU Savings taxation

On 10 March 2014, the European Commission issued MEMO/14/172 (Memo) to answer frequently asked questions about the EU Savings Directive and the Savings Taxation Agreements with non-Member States. In this memo, the European Commission underlines the importance of a strong unified approach in tackling tax evasion.

The provisions that are currently in place for savings taxation are the EU Savings Directive and Savings Taxation Agreements with non-Member States. The EU Savings Directive aims to tackle cross-border tax evasion with an information exchange system for tax authorities.

Individuals with income from savings in other Member States can be identified and subsequently taxed by providing the relevant data to the residence state’s tax authorities automatically. Currently, 26 Member States share their information through this exchange system.

Besides the EU Savings Directive, the EU has concluded Savings Taxation Agreements with neighbouring non-Member countries Switzerland, Andorra, Monaco, Liechtenstein and San Marino. These agreements aim to create the possibility for Member States to tax the savings their citizens have located in these non-Member states. Changes made to the EU Savings Directive should also be implemented in the agreements with these five non-Member States. The goal is (through these Savings Taxation Agreements) to apply the measures applied within the EU in these neighbouring non-Member countries as much as possible.


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