European Parliament stamps its position on the EU’s Mandatory Exchange of Information Directive today.
Brian Hayes MEP today said that tax authorities in the EU, including Irish Revenue, will now have to share sensitive tax details about companies operating in their territories with other tax authorities.
“This agreement sends an important signal. When it comes to EU action on corporate tax issues, transparency is the area we should be pushing. Cross-border tax avoidance is a problem. But this Directive will ensure that tax authorities now have to be transparent with one another about tax deals with companies in their territory.
“It is often the case that some Member States issue a cross-border tax ruling without sharing the necessary information with other Member States that may be impacted. This will now change. Member States will now be obliged to automatically exchange information on their tax rulings.
“Ireland is in a good position to deal with the new rules. We have a very transparent tax system which is recognised by the OECD. Ireland was one of the first countries to sign up to the Foreign Account Tax Compliance Act (FATCA) arrangement with the United States which sets a high global standard on the exchange of tax information. Ireland is firmly committed to the OECD BEPS guidelines which were published in October 2015. Ireland also has an extensive number of bilateral tax treaties with other countries dealing with the issue of double taxation.
“Ireland generally does not issue formal tax rulings; instead it offers non-binding opinions to taxpayers in Ireland. Through this new Directive, Irish Revenue is expected to exchange information about these opinions with other tax authorities.
“Now that the Parliament has given its opinion on the Mandatory Exchange of Information Directive, the European Council will give final sign off at an upcoming Council meeting.”