New tools for the fight against fraud and tax evasion
The #IT2014EU Semester in brief

CC Flickr - Alan Cleaver

Stricter rules preventing the “double non-taxation” of the dividends distributed among corporate groups and the draft Directive widening the mandatory automatic exchange of information are the new useful tools for the fight against fraud and tax evasion in the EU. Thanks to the efforts undertaken by the Italian Presidency, the Council adopted an amendment to EU tax rules aimed at preventing the “double non-taxation” of the dividends distributed among corporate groups stemming from hybrid financial arrangements (i.e. parent and subsidiary companies of the same corporate group). This bridged the gap which up until now had let corporate groups to take advantage of inconsistencies between national tax rules to avoid paying taxes on some profit types distributed within the group. Furthermore, a draft Directive widening the mandatory automatic exchange of information among tax administrations was adopted. In addition to information on income arising from interests, information on income arising from the sales of financial assets and dividends are also exchanged. Cross-border fraud and tax evasion have become one of the main concerns in the EU and in the world. The approval of these two measures will enhance the efficiency and effectiveness of tax collection across the EU.

Last update: 05 January 2015