The European Union is to require member states to exchange information on rulings granted to high-net worth individuals.
The DAC8 transparency rules were announced in 2020, but suspended due to the COVID-19 pandemic.
Announcing the measure, which is to be included in the eight Directive on Administrative Cooperation in tax matters (DAC 8), the Commission acknowledged that they are significant from a tax perspective although there are only a few of these rulings.
The EC explained that the absence of reporting and exchange of this type of information leaves loopholes that can be exploited for tax evasion and avoidance since rulings for HNWIs are often related to corporate taxation.
Under the proposals, rulings would be exchanged in respect of persons who hold minimum of EUR 1M in financial or investable wealth or assets under management, excluding an individual’s main residence. Information will be exchanged by member states on the advance cross-border rulings issued, amended, or renewed between January 1,2020 and December 31, 2025.
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