The European Commission has proposed extending the automatic exchange of information between EU tax administrations, as part of the intensified fight against tax evasion.

Under the proposal, dividends, capital gains, all other forms of financial income and account balances, would be added to the list of categories which are subject to automatic information exchange within the EU.

This paves the way for the EU to have the most comprehensive system of automatic information exchange in the world.

Algirdas Šemeta, Commissioner for Taxation, Customs, Statistics, Audit and Anti-Fraud, said: “ With today’s proposal, member states will be better equipped to assess and collect the taxes they are due, while the EU will be well positioned to push for higher standards of tax good governance globally. It will be another powerful weapon in our arsenal to lead a strong attack against tax evasion.”

Yesterday’s proposal, together with the existing provisions on automatic exchange, mean member states would share as much information among themselves as they have committed to doing with the US under the Foreign Account Tax Compliance Act (FATCA).

Two key pieces of legislation already provide for the automatic exchange of information within the EU. The EU Savings Tax Directive ensures that member states collect data on the savings of non-resident individuals, and automatically provide this data to the tax authorities where those individuals reside.

This system has been in place since 2005. A proposal is on the table in Council to strengthen this directive, and enlarge its scope. At the European Council in May , member states committed to adopting the revised Savings Directive before the end of the year.

The Administrative Cooperation Directive foresees the automatic exchange of information on other forms of income from January 1, 2015. These are: employment, directors’ fees, life insurance, pensions and property. The proposal seeks to revise the Administrative Cooperation Directive, so that automatic information exchange will also apply to dividends, capital gains, other financial income and account balances from that date.