Proposal for a COUNCIL DIRECTIVE amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities
Date: 2016-07-05
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: European tax cooperation, administrative cooperation, administrative formalities, domestic market, exchange of information, fraud, money laundering, tax avoidance, tax offence

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   EUROPEAN COMMISSION  Strasbourg, 5.7.2016  COM(2016) 452 final 2016/0209 (CNS)   Proposal for a COUNCIL DIRECTIVE amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  European  Commission  is  pursuing  an  ambitious  agenda  against  tax  evasion  and 
avoidance, with a view to delivering fairer and more effective taxation in the EU. Increasing 
tax transparency is central to this agenda.  Over the past few  years, significant progress has 
been  made  in  enhancing  tax  transparency  and  strengthening  the  cooperation  between  tax 
authorities  across  the  EU.  Member  States  have  agreed  on  new  legislation  to  automatically 
exchange  information  on  tax  rulings1  and  on  tax-related  country-by-country  reports  of 
multinationals'2.  In  April  2016,  the  Commission  also  proposed  that  large  multinationals 
should  publicly  disclose  a  specified  set  of  tax-related  data  on  a  country-by-country  basis.  
With regard to individuals' accounts, new EU legislation entered into force in January 2016, 
under  which  Member  States'  tax  authorities  will  automatically  exchange  information  on 
financial  accounts  held  abroad.  This  will  help  prevent  funds  from  being  hidden  offshore  to 
escape taxation.  

Recent media leaks, which exposed the large scale concealment of offshore funds, confirm the 
importance  of  the  EU's  tax  transparency  agenda.  They  also  highlighted  areas  where  further 
measures still need to be taken to reinforce the EU and international transparency framework. 
In particular, it has become apparent that tax authorities need greater access to information on 
the  beneficial  owners  of  intermediary  entities  and  other  relevant  customer  due  diligence 
information, if they are to effectively identify and address tax evasion. 

The  G20  statement  of  18  April  calls  on  the  Financial  Action  Task  Force  ('FATF')  and  the 
Global Forum on Transparency and Exchange of Information for Tax Purposes to make initial 
proposals  to  improve  the  implementation  of  the  international  standards  on  transparency, 
including  on  the  availability  of  beneficial  ownership  information,  and  its  international 
exchange.  

the  statement  stressed 

In  their  statement  of  14  April  2016,  the  five  EU  Ministers  of  Finance  attending  the  G20 
focused  on  fight  against  tax  evasion,  aggressive  tax  planning  and  money  laundering.  In 
particular, 
the  effective  and  rapid 
implementation  of  the  Global  Standard  for  Automatic  Exchange  of  Financial  Account 
Information in Tax Matters (“Global Standard”). In addition, it outlined the challenges faced 
with  regard  to  availability  of  beneficial  ownership  information  and  underlined  the  common 
patterns among money laundering, tax evasion and illicit finance. 

importance  of 

the  vital 

Directive  2014/107/EU  (“Directive”)  amending  Directive  2011/16/EU  (“Directive  on 
Administrative  Cooperation”)  was  adopted  in  2014  and  applies  as  of  1  January  2016  to  27 
Member  States  and  as  of  1  January  2017  to  Austria.  This  Directive  implements  the  Global 
Standard for Automatic Exchange of Financial Account Information in Tax Matters (“Global 
Standard”)  within  the  EU.  As  such,  it  ensures  that  information  on  Account  Holders  of 
Financial Accounts is reported to the Member State where the Account Holder is resident.  

In addition, the Directive foresees that, where the Account Holder is an intermediary structure 
(i.e. a Passive Non-Financial Entity), the Financial Institutions shall look through that Entity 
and  identify  and  report  its  Controlling  Persons  (beneficial  owners  in  anti-money-laundering 

1 
2 

OJ L 332, 18.12.2015, p. 1–10 
OJ L 146, 3.6.2016, p. 8–21 

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terminology3).  That  important  element  in  the  application  of  the  Directive  involves  a  step 
relying entirely on  anti-money-laundering (“AML”) information  for the identification of the 
Controlling Persons.  

Without  access  by  the  tax  authorities  to  that  AML  information,  the  effectiveness  of  the 
monitoring of Financial Institutions on applying the Directive on Administrative Cooperation 
will be reduced significantly. In the absence of that information, those authorities will not be 
able to monitor, audit and confirm that the Financial Institutions apply properly the Directive 
and identify correctly and report the Controlling Persons of intermediary structures. 

Therefore, the objective of this initiative is to enable tax authorities to consistently access the 
AML information for the performance of their duties in monitoring the proper application of 
the Directive on Administrative Cooperation by Financial Institutions. 

Tax  administrations'  access  to  AML  information  differs  considerably  throughout  the  EU. 
Even  when  this  access  is  granted,  authorities  often  still  encounter  significant  barriers  that 
hinder the effectiveness of their work against tax avoidance and evasion. The amendments to 
the Fourth Anti-Money-Laundering Directive, referred to in the next section, are important to 
improve  the  identification  of  money-laundering,  corruption,  terrorist  financing  and  other 
criminal  activities.  Tax  authorities  should  also  have  access  to  such  information  in  order  to 
maximise  their  capacity  to  tackle  tax  evasion  and  avoidance.  The  Commission  is  therefore 
proposing  that  this  access  should  be  granted  through  the  Directive  on  Administrative 
Cooperation, which is the framework for many of the EU's other tax transparency measures.  

The  enabling  of  that  access  concerns  internal  organisational  matters  in  Member  States  and 
does  not  involve  any  reporting  or  other  administrative  obligations  on  the  side  of  external 
stakeholders.  Any  potential  additional  burden  from  Financial  Institutions  having  to  present 
AML information to tax authorities during checks, reviews and audits would be: 

(i)  strictly  linked  to  the  supervision  of  already  existing  obligations,  whose  impact  on  the 
administrative burden was already taken into consideration when those obligations were first 
laid down, 

(ii) on a case by case basis depending on the findings during checks, reviews and audits, and  

(iii) always in the context of comprehensive checks, reviews and audits of the fulfilment of all 
those  existing  obligations    for  identification  of  reportable  persons  under  the  Directive  on 
Administrative  Cooperation  and  not  only 
identifying  controlling 
persons/beneficial owners 

the  one 

for 

• 

Consistency with existing policy provisions in the policy area 

Amendments to the Fourth Anti-Money-Laundering Directive (COM(2016) 450) 

In its Action plan for strengthening the fight against terrorist financing adopted on 2 February 
2016,  the  Commission    committed  to  propose  amendments  to  the  Fourth  Anti-Money-
Laundering  Directive4  (“4  AMLD”)  in  the  first  half  of  2016  to  further  reinforce  the  rules 
against terrorist financing. The need to  further reinforce the AML  rules in  order to  improve 
transparency and the availability of beneficial ownership information also led the Commission 

3 
4 

Ref.: Section VIII, point D.5 of Annex I to Directive 2014/107/EU. 
Directive  (EU)  2015/849  of  the  European  Parliament  and  of  the  Council  of  20  May  2015  on  the 
prevention  of  the  use  of  the  financial  system  for  the  purposes  of  money  laundering  or  terrorist 
financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and 
repealing  Directive  2005/60/EC  of  the  European  Parliament  and  of  the  Council  and  Commission 
Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73) 

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to propose amendments to the 4 AMLD after assessing policy options in a second part of the 
Impact Assessment of those amendments to the 4 AMLD.  

The amendments to the 4 AMLD recognise the links between the AML and tax evasion and 
the challenges faced globally. Those amendments rely on the clear synergies in the customer 
due diligence performed under the 4 AMLD and the customer due diligence performed under 
the Directive on Administrative Cooperation. 

Similarly,  the  fact  that  the  AML  information  is  clearly  identifiable  and  available  under 
specific  provisions  in  the  4  AMLD  provides  an  opportunity  for  a  direct  reference  to  those 
provisions,  without  the  need  for  Financial  Institutions  to  duplicate  such  information  for  the 
purposes of the Directive on Administrative Cooperation. 

Those two proposals are presented together with the Communication issued on the same date 
(COM(2016) 451). 

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

• 
The  proposal  modifies  Directive  2011/16/EU5  as  amended  by  Directive  2014/107/EU6, 
Directive 2015/2376/EU7 and by Directive 2016/881/EU8 by introducing a provision enabling 
access by tax authorities to specific AML information for taxation purposes. 

The modifications are contained in Article 1 of this proposal. In particular: 

Article 22 of Directive 2011/16/EU is supplemented with paragraph 1a enabling the access by 
the  tax  authorities  to  beneficial  ownership  and  customer  due  diligence  implementation 
measures,  documentation  and  information  in  the  4  AMLD.  The  paragraph  is  added  to  the 
general  Article  22  on  the  specific  obligations  of  Member  States,  rather  than  the  specific 
Article 8(3a) implementing the automatic exchange. This is because that automatic exchange 
will  inevitably  generate  exchanges  of  information  upon  request  and  spontaneous  exchanges 
with  regard  to  the  quality  and  completeness  of  the  information  automatically  exchanged.  It 
can also lead to for further investigations, for example into accounts or other assets that have 
not  been  subject  to  the  automatic  exchange.  The  access  powers  of  tax  authorities  would 
otherwise also be needed in the context of such exchanges. 

• 

Subsidiarity (for non-exclusive competence)  

The  subject-matter  of  these  modifications  falls  within  the  same  legal  basis  as  Directive 
2011/16/EU, i.e. Article 115 of the Treaty on the Functioning of the European Union (TFEU), 
which  aims  to  ensure  the  proper  functioning  of  the  Internal  Market.  Article  115  TFEU 
provides for the approximation of such laws, regulations or administrative provisions of the 
Member States which directly affect  the establishment or functioning of  the internal  market 
and make the approximation of laws necessary. 

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Council  Directive  2011/16/EU  of  15  February  2011  on  administrative  cooperation  in  the  field  of 
taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1) 

6  Council  Directive  2014/107/EU  of  9  December  2014  amending  Directive  2011/16/EU  as  regards 

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mandatory automatic exchange of information in the field of taxation (OJ L 359, 16.12.2014, p. 1) 
Council  Directive  (EU)  2015/2376  of  8  December  2015  amending  Directive  2011/16/EU  as  regards 
mandatory automatic exchange of information in the field of taxation (OJ L 332, 18.12.2015, p. 1) 
Council  Directive  (EU)  2016/881  of  25  May  2016  amending  Directive  2011/16/EU  as  regards 
mandatory automatic exchange of information in the field of taxation (OJ L 146, 3.6.2016, p. 8) 

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To ensure the proper functioning of the internal market and the level playing field in terms of 
the  abilities  of  Member  States  to  properly  monitor  the  implementation  of  the  Directive  on 
Administrative Cooperation, the tax authorities of all EU Member States shall be entitled to 
the necessary access powers. 

• 

Proportionality 

The  problems  identified  in  the  recent  revelations  have  highlighted  the  fact  that  tax  evaders 
and their facilitators always target the weaker transparency regimes and exploit vulnerabilities 
in their application. In order to ensure that such opportunities are curtailed and to ensure the 
level playing field among Member States, a common set of rules enabling the tax authorities 
to fulfil their monitoring obligations is necessary. 

Thus,  the  proposal  represents  the  most  proportionate  answer  to  the  identified  problem.  The 
proposed amendments consequently do not go beyond what is necessary to address the issues 
at  stake  and,  in  that  way,  to  achieve  the  Treaty's  objectives  of  a  proper  and  effective 
functioning of the Internal Market.  

This proposal complies with the principles of proportionality as set out in Article 5, paragraph 
4 of the Treaty on the European Union. 

• 

Choice of the instrument 

The  monitoring  powers  relate  directly  to  the  Directive  on  Administrative  Cooperation. 
Therefore, the provisions enabling those monitoring powers shall be made part of that same 
Directive. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

The  amendments  may  involve  only  internal  organisational  arrangements  within  the 
administrations of Member States and they do not concern external stakeholders. 

• 

Member States 

In  their  statement  of  14  April  2016,  five  Member  States  outlined  the  importance  of  the 
effective  and  rapid  implementation  of  the  Global  Standard,  which  is  implemented  by  the 
Directive,  and  the  related  AML  challenges.  That  statement  is  now  joined  by  all  the  other 
Member States. 

• 

Impact assessment 

The  Impact  Assessment  to  the  changes  of  the  4  AMLD  contains  an  extensive  analysis  in 
section “5.4 Certain public authorities lack information” and the preferred option as submitted 
to the Regulatory Scrutiny Board is “Clarification regarding access by tax authorities”.  

As explained above, while the amendments to the Fourth Anti-Money-Laundering Directive 
are  important  from  the  perspective  of  the  fact  that  the  work  of  tax  authorities  is  key  in 
identifying and reporting other suspected serious crimes such as corruption, money laundering 
and terrorism financing, the access by tax authorities to information for their own purposes as 
set  out  by  Union  and  national  law,  and  in  particular  for  the  purposes  of  the  Directive  on 
Administrative Cooperation and its proper application, should be regulated in a tax directive. 

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• 

Fundamental rights 

Article  6(1)  of  the  Treaty  on  European  Union  states  that  the  Union  recognises  the  rights, 
freedoms and principles set out in the Charter of Fundamental Rights.  

The  impact  of  the  increased  access  to  beneficial  ownership  information  and  the  underlying 
customer  due  diligence  procedures  have  been  analysed  from  the  perspective  of  ensuring 
respect of Article 7 (right to private and family life) and Article 8 (protection of personal data) 
of  the  Charter.  Against  the  background  that  the  new  measures  deal  with  personal  data,  the 
provision  of  the  access  is  the  only  way  that  the  tax  authorities  can  confirm  not  only  the 
information being reported to them but also that the person being taxed is the real beneficial 
owner, and provide them with strategic tools to fight tax fraud and evasion. 

In addition, tax administrations are already covered by secrecy requirements. The information 
obtained  in  the  course  of  the  fulfilment  of  their  duties  would  fall  into  the  scope  of  those 
secrecy  requirements  and  would  be  subject  to  the  necessary  safeguards.  Article  25  of  the 
Directive  on  Administrative  Cooperation  refers  to  the  applicable  data  protection  rules 
regarding the administrative cooperation among tax authorities and on the collection and use 
of data collected by and from obliged entities. 

To  that  effect,  the  proposed  measures  whilst  potentially  interfering  with  the  fundamental 
rights  to  private  life  including  confidentiality  of  communications  as  well  as  protection  of 
privacy  and  of  personal  data  they  are  necessary  and  proportionate  to  ensure  the  proper 
functioning of the tax systems and the supervision of the proper fulfilment of the obligations 
of all actors. 

4. 

BUDGETARY IMPLICATIONS 

There is no budgetary implication for the EU Budget. 

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2016/0209 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2011/16/EU as regards access to anti-money-laundering information 
by tax authorities 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 113 and 115 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Parliament9, 
Having regard to the opinion of the European Economic and Social Committee10, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

Council Directive 2011/16/EU11 as amended by Directive 2014/107/EU12 applies as of 
1  January  2016  to  27  Member  States  and  as  of  1  January  2017  to  Austria.  That 
Directive  implements  the  Global  Standard  for  Automatic  Exchange  of  Financial 
Account Information in Tax Matters (“Global Standard”) within the Union. As such, it 
ensures that information on Account Holders of Financial Accounts is reported to the 
Member State where the Account Holder is resident. 

In  addition,  Directive  2011/16/EU  stipulates  that,  where  the  Account  Holder  is  an 
intermediary  structure,  Financial  Institutions  are  to  look  through  that  structure,  and 
identify and report its beneficial owners. That important element in the application of 
the Directive relies on anti-money-laundering ('AML') information obtained pursuant 
to  Directive  2015/849/EU  of  the  European  Parliament  and  of  the  Council13  for  the 
identification of the beneficial owners. 

(3) 

To ensure effective monitoring of the application by Financial Institutions of the due 
diligence procedures set forth in Directive 2011/16/EU, the tax authorities need access 
to  AML  information.  In  the  absence  of  such  access,  those  authorities  would  not  be 

9 
10 
11 

12 

13 

OJ C , , p. . 
OJ C , , p. . 
Council  Directive  2011/16/EU  of  15  February  2011  on  administrative  cooperation  in  the  field  of 
taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1). 
Council  Directive  2014/107/EU  of  9  December  2014  amending  Directive  2011/16/EU  as  regards 
mandatory automatic exchange of information in the field of taxation (OJ L 359, 16.12.2014, p. 1). 
Directive  (EU)  2015/849  of  the  European  Parliament  and  of  the  Council  of  20  May  2015  on  the 
prevention  of  the  use  of  the  financial  system  for  the  purposes  of  money  laundering  or  terrorist 
financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and 
repealing  Directive  2005/60/EC  of  the  European  Parliament  and  of  the  Council  and  Commission 
Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73). 

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(4) 

(5) 

(6) 

(7) 

able  to  monitor,  confirm  and  audit  that  the  Financial  Institutions  apply  properly 
Directive 2011/16/EU by identifying correctly and reporting the beneficial owners of 
intermediary structures.  

It  is  therefore  necessary  to  ensure  the  access  by  the  tax  authorities  to  the  AML 
information,  procedures,  documents  and  mechanisms  for  the  performance  of  their 
duties in monitoring the proper application of Directive 2011/16/EU. 

This Directive respects the fundamental rights and observes the principles recognised 
in particular by the Charter of Fundamental Rights of the European Union. Where this 
Directive requires that access to personal data by tax authorities be provided by law, 
this does not necessarily require an act adopted by the parliament, without prejudice of 
the constitutional order of the Member State concerned.  However, such a law should 
be  clear  and  precise  and  its  application  should  be  clear  and  foreseeable  to  persons 
subject to it, in accordance with the case-law of the Court of Justice of the European 
Union and the European Court of Human Rights. 

Since  the  objective  of  this  Directive,  namely  the  efficient  administrative  cooperation 
between Member States and its effective monitoring under conditions compatible with 
the  proper  functioning  of  the  internal  market,  cannot  be  sufficiently  achieved  by  the 
Member  States  and  can  therefore,  by  reason  of  the  uniformity  and  effectiveness 
required,  be  better  achieved  at  Union  level,  the  Union  may  adopt  measures,  in 
accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on the 
European Union. In accordance with the principle of proportionality, as set out in that 
Article, this Directive does not  go beyond what is  necessary in  order to achieve that 
objective. 

The  customer  due  diligence  carried  out  by  Financial  Institutions  under  Directive 
2011/16/EU  has  already  started  and  the  first  exchanges  are  to  be  finalised  by 
September  2017.  Therefore,  in  order  to  ensure  that  the  effective  monitoring  of  the 
application  is  not  delayed,  this  Amending  Directive  should  enter  into  force  and  be 
transposed by 1 January 2017.  

(8) 

Directive 2011/16/EU should therefore be amended accordingly. 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 

In Article 22 of Directive 2011/16/EU, the following paragraph 1a is inserted: 

 “(1a)  For  the  purpose  of  the  implementation  and  enforcement  of  the  laws  of  the  Member 
States  giving  effect  to  this  directive,  and  to  ensure  the  functioning  of  the  administrative 
cooperation it establishes, Member States shall provide by law for access by tax authorities to 
the mechanisms, procedures, documents and information referred to in articles 13, 30, 31, 32a 
and 40 of Directive 2015/849/EU of the European Parliament and of the Council*. 

____________________________ 

* Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of 
the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation 
(EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the 
European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).”. 

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Article 2 

1. 

Member States shall adopt and publish, by 31 December 2016 at the latest, the laws, 
regulations  and  administrative  provisions  necessary  to  comply  with  this  Directive. 
They shall forthwith communicate to the Commission the text of those provisions. 

They shall apply those provisions from 1 January 2017. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the date of its adoption. 

Article 3 

This Directive is addressed to the Member States. 

Done at Strasbourg, 

Article 4 

For the Council 
The President 

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