On 16 December 2015 the Article 29 Data Protection Working Party (Working Party) published guidelines for Member States on the criteria to ensure compliance with data protection requirements in the context of the automatic exchange of personal data for tax purposes.
Over the past few years, there has been an increase in sharing of data in the fight against tax evasion and in the United States, for example, the Foreign Account Tax Compliance Act (FATCA) was enacted to combat tax evasion by US tax residents using foreign accounts.
In addition to FATCA, the EU adopted Directive 2011/16/EU (amended by Directive 2014/107/EU), to ensure a harmonised approach to anti-tax evasion data reporting.
However, the Working Party guidelines inform EU tax authorities, and those working with them, on data protection principles that need to be adhered to where data is shared both within a Member State, between Member States and from the EU to other countries, such as USA.
The guidelines not only set out the principles for intra EU and extra EU data sharing but also provide a questionnaire to national tax authorities in order to gather information on tax sharing protocols and practices.