Brussels, 14/04/2016 (Agence Europe) - Lack of harmonisation in the exchange of information and the freedom of establishment within the European Union are not an obstacle for a member state requiring banks to provide information from their subsidiaries abroad in order to carry out efficient tax investigations.
This was the ruling made by the European Court of Justice on Thursday 14 April in a case concerning bank secrecy in Austria (Case C-522/14). In the main case, a German bank opposes the publication of details of one of its deceased client's assets and liabilities - information requested by the German tax authorities. It argued that the client had an account in a branch in Austria where the rules are different from Germany because bank secrecy in Austria is protected by criminal penalties, including for accounts in a subsidiary of a bank with its headquarters in another member state.
Just like the Advocate General (see EUROPE 11440), the Court rejected this argument. It feels that effective tax investigations can prevail in such cases, leaving Germany free to establish the obligation for a bank to provide information which has its headquarters in Germany and for this to extend to its subsidiaries registered abroad. The freedom of establishment does not mean that a member state must change its tax rules to bring them into line with those of other member states in order to remove any differences between national tax regulations, explains the bank.
This ruling is not based on recent progress in administrative cooperation in the fiscal domain, such as the bilateral agreement that came into force in March 2012 between Germany and Austria, or EU directive 2011/16. The events that led to this case date from earlier on and therefore the Court based the ruling on Article 49 of the TFEU regarding the freedom of establishment. (Original version in French by Jan Kordys)