A political agreement (‘general approach’) on the eight revision of the ‘administrative cooperation’ directive in the field of taxation (DAC 8) is expected to be reached at the next EU ‘Economic and Financial Affairs’ Council on Tuesday 16 May. EUROPE was able to obtain the document and the compromise drafted by the Swedish Presidency.
This revision ‘DAC 8’ is intended to include crypto-assets (see EUROPE 13078/5). In the compromise proposal, the Presidency suggested extending the scope to electronic money tokens, in addition to crypto-assets, stablecoins and certain non-fungible tokens (NFT).
The European Commission’s original proposal included an obligation for crypto-asset service providers located in third countries that provide services to EU crypto-asset users to inform the tax administrations of the Member States in which the crypto-asset users reside. The Presidency suggests that it should be the third country’s jurisdiction that communicates this information to the Member States’ tax administrations.
The Presidency also proposes that Member States use the commentary on the OECD Model Competent Authority Agreement and Reporting Framework for Crypto-assets as a source of illustration or interpretation and to ensure consistency of application across Member States.
Concerning tax cooperation as such, the Presidency makes several changes concerning the tax identification number (TIN). The general approach includes an annexed statement by Belgium, which wants to strengthen the use of the TIN within the EU. “We must look for ways to enable tax administrations to trace and identify taxable events in the most efficient way possible”, it says.
Thus, the compromise provides for the TIN of declared persons and entities to be indicated in cases subject to mandatory automatic information exchange. In order to increase the availability of the TIN to the competent authorities of the Member States, it is proposed that each Member State should take the necessary measures to require that the TIN of individuals and entities, issued by the Member State of residence, be declared in respect of income from employment, directors’ remuneration and pensions.
The Presidency further details the measures on advance cross-border rulings which determine whether or not a person is a tax resident of the Member State. These should be exchanged automatically. However, advance cross-border rulings on withholding tax on non-resident wage income, executive remuneration and pensions should not be exchanged unless the amount of the transaction or series of transactions subject to the advance cross-border ruling exceeds the threshold.
To read the Presidency compromise: https://aeur.eu/f/6uf
And the general approach: https://aeur.eu/f/6ug (Original version in French by Anne Damiani)