The European Union has authorized negotiations to amend agreements concerning the automatic exchange of financial account information, signaling a significant move towards enhancing international tax compliance.
- Decision (EU) 2024/1489, approved by the Council of the European Union on May 21, 2024, authorizes initiation of negotiations aimed at improving existing agreements between the EU and Switzerland, Liechtenstein, Andorra, Monaco, and San Marino.
- These agreements facilitate reciprocal automatic exchange of financial account information between EU Member States and the aforementioned third countries, utilizing the Common Reporting Standard (CRS) developed by the OECD to prevent and combat tax fraud and evasion.
- Significant revisions to the CRS were ratified within the OECD on August 26, 2022, with implementation slated for January 1, 2026, prompting the EU to undertake measures to incorporate these changes into its regulatory framework.
- Each agreement includes provisions mandating bilateral consultations between the contracting parties in response to important changes adopted at the OECD level regarding the CRS.
- Recognizing the importance of seamless cooperation in the field of automatic exchange of financial account information beyond January 1, 2026, the EU has initiated negotiations to amend the existing agreements.
- The European Commission has been authorized to lead these negotiations on behalf of the Union, with clear directives outlined in the accompanying addendum to Decision (EU) 2024/1489.
- The negotiations will be conducted in close collaboration with the Council Working Party on Tax Questions, designated as the special committee within the meaning of Article 218(4) of the Treaty on the Functioning of the European Union.
- Regular reporting and consultation mechanisms have been established to ensure transparency and accountability throughout the negotiation process.
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