New EU Directive on Automatic Exchange of Tax Rulings and APAs
New EU Directive on Automatic Exchange of Tax Rulings..
Global Tax Adviser, December 15, 2015 .The EU will now require its member states to automatically exchange information on advance cross-border tax rulings and advance pricing arrangements (APAs) under an EU directive, adopted on December 8, 2015. As a result of this new directive, the following rules will apply to EU member states as of January 1, 2017:
EU member states receiving information about advance cross-border tax rulings and advance pricing arrangements will be able to request further information (when appropriate)
The EU will develop a "secure central directory" for storing the information that is being exchanged and, for the purpose of the directive, the directory will be accessible to all EU Member States
When one EU Member State issues an advance tax ruling or transfer pricing arrangement, any other affected EU Member State may monitor the situation and the possible impact on its tax revenue.
Exemption
Countries may be able to exclude advance tax rulings and APAs from the information exchange, but only if they were issued to companies with an annual net turnover of less than €40 million at the group level, and only if they were amended or renewed before April 1, 2016. This exemption will not apply to companies conducting "mainly financial or investment activities."
Effective date, application rules
There are two other important rules concerning rulings issued before 2017:
- If advance cross-border rulings and APAs were issued, amended or renewed between January 1, 2012 and December 31, 2013, and if they were still valid on January 1, 2014, then the exchange of information will take place
- If advance cross-border rulings and APAs are issued, amended or renewed between January 1, 2014 and December 31, 2016, the exchange of information will take place regardless of whether or not they are still valid.
The new rules will be applied from January 1, 2017. In the meantime, existing obligations for member states to exchange information will stay in place.
For more information, see KPMG Global's TaxNewsFlash, "EU: Directive on Automatic Exchange of Tax Rulings", or contact your KPMG adviser.
Disclaimer
Information is current to December 15, 2015. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
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