On 8 December 2015, the Council adopted a Directive (‘New Directive’) requiring the automatic exchange of information on tax rulings and advance pricing arrangements (‘APAs’) between Member States and, subject to limitations, to the EU Commission. The New Directive is in line with the political agreement that was reached by the Council on 6 October 2015 (Tax Flash of 7 October 2015).
The New Directive is one of the results of the EU’s efforts to combat tax avoidance and aggressive tax planning and is also largely in line with developments within the OECD and its work on tax base erosion and profit shifting.
The new rules will apply from 1 January 2017 and will require Member States to automatically exchange a basic set of information on tax rulings and APAs that are issued, amended or renewed on or after
1 January 2017. Concerning rulings issued before 1 January 2017, the following rules will apply:
- If tax rulings and APAs are issued, amended or renewed between 1 January 2012 and
31 December 2013, exchange shall take place under the condition that they are still valid on
1 January 2014.
- If tax rulings and APAs are issued, amended or renewed between 1 January 2014 and
31 December 2016, exchange shall take place irrespectively of whether they are still valid or not.
- Member States will have the possibility (not an obligation) to exclude from information exchange tax rulings and APAs issued to companies with an annual net turnover of less than €40 million at a group level, if such tax rulings and APAs were issued, amended or renewed before 1 April 2016. However, this exception will not apply to companies conducting mainly financial or investment activities.
Member States may request additional information, including the full text of the tax ruling or APA, under the normal procedures for information exchange upon request provided for in Directive 2011/16/EU.