Skip to main content

  • AddRemove
  • Build a Report 
Legal Update

Decision on Repeal of Directive 2003/48/EC of the Council on Taxation of Savings Income ("EU Savings Directive")

23 November 2015
Mayer Brown Legal Update

On November 10, 2015 the Council of the European Union adopted a directive on the repeal of the EU Savings Directive. The directive provides for a repeal of the EU Savings Directive from January 1, 2016 onwards. In the case of Austria, a transitional arrangement applies stating that the EU Savings Directive will be repealed in this country with effect from January 1, 2017 only. However, specific administrative requirements will remain unaffected, such as the reporting and exchange of information duties, as well as obligations on withholding taxes regarding payments made prior to these dates. The adopted directive states that the Member States are not obliged to apply the new requirements which would have resulted from the latest Amending Directive of March 24, 2014. The repeal of the EU Savings Directive became necessary following reinforced measures to combat tax evasion both on international and EU level. This caused considerable overlaps which are to be removed by repealing the EU Savings Directive.

Background:

Starting in 2005, the EU Savings Directive has allowed the fiscal authorities of the Member States better access to information on private savers; in Germany, the directive was implemented by the Interest Disclosure Act (Zinsinformationsverordnung (ZIV)). The EU Savings Directive obliges the Member States to transmit to another Member State details of payments of interest (or similar income) paid by a person within their jurisdiction to an individual resident in that other Member State or to certain other types of entities established in that other Member State. During a transition period, Austria was allowed to withhold taxes on such payments. Analogous rules apply in some Non-EU states, such as Liechtenstein and Switzerland.

On March 24, 2014 the Council of the European Union adopted a directive amending the EU Savings Directive which would have had to be implemented by the Member States into national law and would have had to be applied as of January 1, 2017. Among other things this Amending Directive provided for a broadened definition of the term interest and an extended application area of the EU Savings Directive to other, generally equivalent types of savings income (for instance, savings income from investment funds and life insurance contracts). Moreover, the fiscal authorities, by using a "look-through" approach, were supposed to take measures to identify those benefitting from interest payments.

The repeal of the EU Savings Directive has now made the implementation of the Amending Directive obsolete.

In December 2014, the Council of the European Union adopted Directive 2014/107/EU which provides an extension of Directive 2011/16/EU on administrative cooperation in the field of taxation (“EU Mutual Assistance Directive”). The amended Mutual Assistance Directive implements a standard for the exchange of information developed by the OECD; it will enter into force on January 1, 2016. It provides for an enhanced exchange of information on interest, dividends, and other types of income. Using the data of 2016, the Member States, as of September 30, 2017, will exchange potentially tax-relevant information on the financial accounts held by persons in another state than the respective state of residence. Existing agreements between the EU and Andorra, Liechtenstein, Monaco, San Marino, and Switzerland which are based on the EU Savings Directive are currently adapted to the new standard.

The Build a Report feature requires the use of cookies to function properly.  Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently.  If you do not accept cookies, this function will not work.  For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.