Over recent years huge advances has been made in the development of legislation on automatic exchange of information systems to step up the battle against the existence of financial assets hidden from the authorities.
The legal foundations for this legislative development process are found in (i) Council Directive 2011/16/EU, of 15 February 2011 on administrative cooperation in the field of taxation, (ii) the OECD Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (2014); or (iii) the FATCA Agreements (in Spain the Agreement with the United States done at Madrid on May 14, 2013 was published in the Official State Gazette (BOE) on July 1, 2014). This legislative process has continued moving forward with the following instruments, discussed in this Newsletter:
Council Directive (EU) 2015/2376 of 8 December 2015 amending Directive 2011/16/EU to encourage efficient spontaneous exchange of information in respect of advance cross border rulings and advance pricing arrangements.
Commission Implementing Regulations (EU) 2015/2378 of 15 December 2015 which approves standard forms and computerized formats for the exchange of tax information within the European Union.
Council Decisions (EU) 2015/2400, 2015/2453 and 2015/2469 (all of 8 December 2015) on the Amending Protocols to the Agreements between the European Community and the Swiss Confederation, the Principality of Liechtenstein and the Republic of San Marino, providing for measures equivalent to those laid down in Council Directive 2003/48/EC on taxation of savings income in the form of interest payments.
In Spain, a further notable event was the publication of Royal Decree 1021/2015, of December 13, 2015, in which the obligation has now been laid down to identify the tax residence of the people who own or have control over certain financial accounts.
This legal automatic exchange of information system appears to have been put in place under the assumption of the ability of tax authorities to provide quality information (error-free, in other words) a context in which we highlight in this newsletter the recent TEAC (Central Economic Administrative Tribunal) Decision of December 2, 2015 (01789/2015/00).
That Decision looks at the probative value of this information and the Tribunal concludes that this is information with an immediate probative value, and therefore gives greater value to the information from other states.
These terms leave no doubt that the international exchange of information could place the taxpayers concerned in a position of being unable to defend themselves.