COMMISSION STAFF WORKING DOCUMENT on the application of Council Directive (EU) no 2011/16/EU on administrative cooperation in the field of direct taxation Accompanying the document Report from the Commission to the European Parliament and the Council on the application of Council Directive (EU) no 2011/16/EU on administrative cooperation in the field of direct taxation
Date: 2017-12-18
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: European tax cooperation, administrative cooperation, application of EU law, direct tax, exchange of information, tax authorities, tax avoidance, tax evasion

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 18.12.2017  SWD(2017) 462 final  COMMISSION STAFF WORKING DOCUMENT on the application of Council Directive (EU) no 2011/16/EU on administrative cooperation in the field of direct taxation Accompanying the document Report from the Commission to the European Parliament and the Council  on the application of Council Directive (EU) no 2011/16/EU on administrative cooperation in the field of direct taxation  {COM(2017) 781 final}  
 
 
1. 

INTRODUCTION 

This  Staff  Working  Document  contains  qualitative  and  quantitative  information  on  the 
application  of  the  Directive  2011/16/EU  (the  Directive  or  DAC)  since  its  entry  into  force  on 
1 January 2013.  It  looks  at  the  key  provisions  of  the  Directive,  in  particular  exchange  of 
information (EOI) it its various forms: on request, spontaneously and in automatic manner; and 
at other ways to cooperate. 

This report has been written by the Commission services on the basis of information and data 
gathered  through  questionnaires  and  statistics  from  Member  States  about  their  efforts  in 
applying  the  Directive,  as  well  as  on  the  practical  experiences  when  cooperating  with  other 
Member States.  

As  regards  statistical  data,  Member  States  replies  rely  on  their  national  databases  and 
registering  systems,  if  any,  which  may  differ  considerably  among  them,  resulting  in 
information not having the same level of detail. This is especially true for the quantification of 
the accrued tax benefit thanks to administrative cooperation which has not been reported by the 
majority of Member States due to the difficulties underlined by the Member States to obtain the 
figures.  

The  difficulty  in  evaluating  the  appropriate  share  of  added  revenues  due  to  administrative 
cooperation  activities  is  the  main  reason  given  by  Member  States  for  not  being  able  to  give 
statistical data on accrued tax benefit. Normally the tax authorities use several international and 
national sources and tools to get all necessary details of a certain taxpayer under tax audit, and 
administrative cooperation within EU is only one of many sources for information. 

2. 

APPLICATION OF ADMINISTRATIVE COOPERATION IN 2013-MID 2017 

A  consolidated  version  of  DAC1  contains  31  articles  and  several  annexes.  It  is  divided  into 
chapters:  the  first  chapter  concerns  general  provisions,  and  deals  with  subject  matter,  scope, 
definitions  and  organisations;  the  second  chapter  covers  exchange  of  information;  the  third 
chapter is about other forms of administrative cooperation; the fourth chapter sets out the "rules 
of the game" i.e. the conditions governing administrative cooperation; the fifth chapter is about 
the  relations  with  the  Commission;  the  sixth  is  about  relations  with  third  countries;  finally, 
chapter seven lists general and final provisions.  

The  Directive  aims  to  ensure  a  strong  legal  basis  for  administrative  cooperation  within  the 
Union  leading  to  a  higher  degree  of  transparency:  wide  in  scope,  it  provides  for  a 
comprehensive framework for administrative cooperation, while improving the timeline for the 
exchange  of  information  on  request  and  spontaneously.  Its  operation  enhances  the  automatic 
exchange of information, allowing for a broad use of the information exchanged and ensuring a 
level playing field between the Member States, due to the most favoured nation clause foreseen 
in Article 19.  

By  implementing  the  legal  provisions  of  the  Directive,  effective  exchange  of  information  is 
accomplished  despite  the  differences  in  domestic  legislations,  such  as  the  different  statute  of 
limitation  for  carrying  out  tax  audits.  To  support  the  cooperation  foreseen  in  the  Directive, 

1 The Directive 2011/16/EU and consequential amendments adopted between 2014 and 2016 

1 

 
 
 
                                                 
innovative standardised forms for the exchanges and a secure channel of communication were 
developed. 

3. 

THE  SUBJECT  AND  THE  SCOPE  OF  ADMINISTRATIVE  COOPERATION 
(ARTICLES 1-2) 

Member  States  have  applied  the  Directive  first  and  foremost  by  exchanging  tax  information 
with each other. Information is to be exchanged when foreseeably relevant2.  

In  the  exchange  of  information  on  request  Member  States  have  applied  the  principle  of 
foreseeable  relevance  with  no  major  problem,  even  if  bilateral  contacts  have  been  required 
sometimes  to  get  a  confirmation  that  the  requested  information  was  relevant  to  assess  the 
taxpayer's tax obligation in the requesting Member State. 

On the other hand, in the framework of spontaneous exchange of information the principle of 
foreseeable relevance was applied in a very restrictive manner by Member States, with specific 
reference to the cross-border tax rulings and advance pricing agreements and few, if any, were 
exchanged.  The  LuxLeaks  scandal  raised  awareness  on  the  inappropriate  application  of  the 
Directive  and,  as  further  explained  later  in  this  report,  the  Commission  intervened  proposing 
the mandatory automatic exchange of cross-border tax rulings and advance pricing agreements 
with lead to the final adoption of the Directive 2015/2376/EU (DAC 3).   

Contrary to fears that it might hinder mutual assistance in criminal matters there is evidence of 
improvements  in  interaction  between  administrative  cooperation  and  criminal  matters.    For 
example,  information  gathered  from  exchanges  may  be  used  for  other  purposes  such  as  in 
criminal investigations of tax crimes.  

4. 

ORGANISATION (ARTICLE 4) 

The  Directive  reinforced  the  efficiency  of  cooperation  by  underlining  the  importance  of 
decentralised organisation in the Member States.  

All  Member  States  have  designated  a  competent  authority,  typically  their  tax  administration, 
for  the  purposes  of  the  Directive.  They  have  also  designated  a  central  liaison  office  (CLO) 
within  their  competent  authorities  who  have  principal  responsibility  for  contacts  with  other 
Member States. In most cases, Member States have in addition designated liaison departments 
who are entitled to directly exchange information. Several have designated individual officials 
as authorised to exchange information.  

The  number  of  staff  members  dedicated  to  administrative  cooperation  in  the  field  of  direct 
taxation  differed  in  2013-2014  widely  between  Member  States,  being  in  total  from  1 
responsible person in the central liaison office and going up to 84 persons (4 at CLO level, 80 
in other departments or units). Most usually the number was between 2 and 24 staff members. 
During  2015-2016  CLO  was  acting  as  a  coordination  office  with  supervision  of  the  overall 
application  of  the  Directive  in  20  Member  States,  and  as  an  operational  unit  in  8  Member 

2  
particular cases and identified taxpayers, and they cannot carry out “fishing expeditions". 

The  foreseeable  relevance  means  that  the  Member  States  shall  exchange  information  concerning 

2 

 
 
 
                                                 
States.  Member  States  have  reported  that  relatively  few  staff  is  dedicated  to  administrative 
cooperation. Most tax administrations report having between 1 to 5 staff in the CLOs.  

5. 

EXCHANGE  OF  INFORMATION  ON  REQUEST  (ARTICLES  5-6-7  AND  17-
18) 

Exchange of information on request (EOIR) is the core function of administrative cooperation 
and  takes  place  in  steps,  as  defined  in  Articles  5,  6  and  7  of  the  Directive.  The  competent 
authority of a Member State sends a request for information to another to get information that is 
foreseeably  relevant  to  the  administration  and  enforcement  of  the  domestic  laws  of  the 
requesting  Member  State.  The  requested  authority  acknowledges  receipt  of  the  request  and 
performs all the activities needed to gather such information, finally, once the information has 
become available, the requested Member State replies to the requesting authority.  

Since 2013, overall Member States have sent each other nearly 35,000 requests for information. 
The charts below show the percentage of requests sent and received per Member State.  

20,0

18,0

16,0

14,0

12,0

10,0

8,0

6,0

4,0

2,0

0,0

17,4 

12,7 

18,6 

10,0 

4,3 

1,9 

1,6 

0,7 

0,0 

4,3 

2,7 

1,0 0,5 

1,1 

2,0 

0,5 

0,8 

2,7 

1,8 

1,7 

0,1 

0,0 

4,1 

2,8 

2,9 

1,7 

1,7 

0,5 

AT BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK

Picture 1: Percentage of requests sent per Member State (NB: the percentages are rounded to one decimal) 

3 

 
 
 
 
15,1 

16,0

14,0

12,0

10,0

8,0

6,5 

6,0

5,3 

5,9 

4,6 

10,8 

7,3 

7,1 

6,7 

3,6 

3,0 

3,4 3,4 

1,6 

1,5 

0,7 

1,4 

0,4 

0,6 

0,5 

1,0 

1,5 

0,8 

1,7 1,5 1,6 

2,1 

0,5 

4,0

2,0

0,0

AT BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK

Picture 2: Percentage of requests received per Member State(NB: the percentages are rounded to one decimal) 

Member States reported that the requests are formulated in a clear way and therefore the quality 
of the requests is in general very good. In very few cases they have notified deficiencies and/or 
requested additional background information from the requesting Member State as foreseen by 
Art.7(4),  mainly  to  request  additional  information  needed  for  the  proper  identification  of  the 
concerned taxpayer.  

The main types of information which are generally requested from each other Member State in 
case of natural persons are: residency status, banking information, business transactions, tax 
returns, general tax information and payments.  

The  main  types  of  information  which  are  generally  requested  concerning  legal  persons  and 
other  arrangements  are:  ownership  information,  tax  returns,  business  transactions,  banking 
information, transfer pricing and existence of human and material resources (i.e. to assess the 
existance of a permanent establishement). 3 

The  obligation  to  provide  information  even  if  held  by  banks  or  other  financial  institutions 
contained in Article 18 led to a greater tax transparency and can be regarded as one of the most 
important  achievements  of  the  Directive.  Member  States  have  been  exchanging  banking 
information over the period under examination and did not report any particular problem in the 
practice of the exchanges, apart from some delays due to the existing domestic procedures to 
obtain  the  information  from  the  bank  or  other  financial  institutions.  The  number  of  requests 
related to banking information was not collected. 

Since  2013,  overall  Member  States  have  received  around  31,000  full  replies4,  out  of  which 
more than half were given within the six months deadline. Within that deadline Member States 

3   The items listed above cannot be considered complete because not all Member States keep records of the type 

of information exchanged. 

4   The  difference  between  the  total  number  of  requests  sent  and  total  number  of  replies  received  may  be 
explained  by  (i)  a  different  counting  methods  between  Member  States  for  statistical  purposes,  (ii)  replies 

4 

 
 
 
                                                 
have also provided partial replies to the pending requests, but the related figures are not readily 
available. 

Picture 3: Total number of full replies received (blue) and number of those replies received within 6 months (red) 
NB: in 2013 the number of replies received within 6 months was not collected from Member States.  

Member States reported that some delays in replying within the relevant time frame were due 
to  the  complexity  of  the  case,  the  difficulties  encountered  to  obtain  the  information  from  the 
taxpayer  and/or  an  ongoing  investigation.  In  such  a  case,  as  per  Art.  7(5),  they  informed  the 
requesting  Member  State  of  the  reasons  and  the  expected  date  of  the  reply.  Member  States 
usually send reminders regarding the pending request until a reply is received.  

Member  States  reported  that  in  very  few  circumstances  they  agreed  bilaterally  on  a  different 
time limit than the standard of 2 months and 6 months according to Art. 7(2). This has occurred 
especially  in  complex  cases  often  involving  also  a  request  for  information  held  by  banks.  
There  the  process  includes  first  a  request  from  one  Member  State  to  another  Member  State, 
which then has to contact the bank in its country and inquire for certain  information needed in 
another Member State for tax purposes. 

Member  States  are  in  general  satisfied  with  the  overall  quality  and  the  completeness  of  the 
information  received.  They  praised  as  well  the  efforts  made  in  order  to  comply  with  given 
deadlines and to send information or a status report on the measures taken. However, Member 
States  consider  the  requirement  to  acknowledge  receipt  of  a  request  as  per  Article7(3) 
burdensome and have suggested some automation to ease the process. 

Member States reported that in some instances they have been unable to respond and, in line 
with Art. 7(6), have informed the requesting Member State of the reason, being most frequently 
the  taxpayer  not  known,  unattainable  or  not  existing  anymore,  the  domestic  legal  framework 
constraints in the requested Member State and the expiration of the statute of limitation.  

falling under different statistical period and (iii) increase of requests due to the introduction of the electronic 
forms which was not always supported by an increase of the human resources available to deal with the cases. 

5 

 
 
 
                                                                                                                                                           
 
Since 2013, there have been only 31 explicit refusals to reply to a request for information for 
one of the circumstances listed in Article 17. 

The Commission services acknowledge the efforts made by the Member States to comply with 
the time limits established by the Directive but would encourage them to continue exchanging 
good quality information and to improve the timeliness of the replies. 

6. 

AUTOMATIC EXCHANGE OF INFORMATION (ARTICLE 8)  

Automatic  exchange  of  information  (AEOI)  in  administrative  cooperation  means  sending 
predefined tax data regularly without prior request from one Member State to the Member State 
where a taxpayer is resident. The aim is to provide structured and more detailed tax information 
about  the  activities  of  specific  and  identified  taxpayers  who  are  resident  in  a  given  Member 
State but who have reportable income and capital in another Member State. 

In  line  with  the  provisions  of  Article  8(1)  of  the  Directive  Member  States  sent  bilaterally 
information - already available and retrievable - in an automated manner for taxable periods 
2014  and  2015  on  the  five  categories  of  income  and  capital:  income  from  employment  (IE), 
director’s fees (DF), life insurance products (LIP), pensions (PEN), ownership of and income 
from  immovable  property  (IP).  Sending  the  information  on  each  category  was  given  in  the 
Directive  a  step-by-step  approach,  where  the  first  exchanges  took  place  in  2015  regarding 
taxable period of 2014. The target was for all Member States to exchange information under at 
least three of the five categories regarding taxable periods as from 1 January 2017.  

Before  1  January  2019,  the  Commission  shall  submit  a  report  that  provides  an  overview  of 
AEOI. If appropriate, the Commission shall propose to the Council to consider further steps to 
strengthen the efficiency of AEOI, such as: the obligation for Member States to communicate 
all five categories of income and capital, to include other categories and items, and to review 
the conditions laid down in Article 8(1), such as the availability of information. 

Picture 4: Total number of messages sent between 2015-2017, by income/capital category (NB: one message may 
contain thousands of records). In 2017  number of messages sent is tracked until end of August only. 

6 

 
 
 
 
 
Systematic  and  automatic  communication  of  predefined  information  is  just  the  first  step  of  a 
long processing. The receiving Member State matches the data received with a taxpayer in the 
national  database,  and  if  the  matching  is  successfully  performed,  the  information  received  is 
finally usable. Therefore, the quality of data must be ensured in order for the receiving Member 
State to correctly and efficiently identify the relevant taxpayer in the national database and use 
the data received.  The more accurate the provided information is, containing for example the 
correct  tax  identification  number  (TIN)  and  full  name,  the  lesser  the  need  for  manual 
intervention for matching at the receiving Member State. The more incomplete the information 
is  the  more  details  have  to  be  reviewed,  such  as  name,  address,  birth  date.  The  identification 
process  can  still  be  automated  to  an  extent,  but  poor  information  which  requires  manual 
matching means more work for the receiving administration. Non-matching should not exist in 
the long run as the quality of information should improve thanks to the bilateral feedback, by 
the efforts of the sending Member State.  

Matching: an example of income from employment  
The  charts  below  show  how  identifying  the  taxpayer  in  the  residence  country  has  progressed 
during the first two years in one Member State in relation to employment income information.  

Picture  5:  An  example  of  division  of  taxpayer  identification  methods  actually  used  on  AEOI  data,  where  exact 
information and incomplete information have been done in an automated manner.  

The increase of automated matching from 84 % to 91 % with exact information and incomplete 
information  in  the  example  of  employment  income  can  be  explained  by  the  fact  that  most 
Member States have started the exchanges with this income type as it has most typically been 
available  for  AEOI.  Thus,  for  this  income  type  there  has  already  been  a  possibility  for 
enhancement in the national collection of the data. Improvement of the quality of the data sent 
has simplified matching in the receiving Member State.  

On the contrary to the matching progress related to employment income, the matching for life 
insurance products and directors' fees did  not  progress as much, because  the data flows were 
modest during 2015 and only a bit more extensive in 2016. The low amount of data exchanged 
may mean that the data was not available in majority of the Member States, or that the efforts 
for retrieving the data were still under work in the Member States. 

During the first two years of AEOI activities, Member States have reported that they generally 
see Article 8 working well for the enhancement of tax data flow to the residence country. Some 

7 

 
 
 
have  expressed  wishes for an  extension  of the scope  of mandatory  AEOI, and  some consider 
the AEOI provision on a general level as one of the best achievements of the Directive.  

The  scope  of  mandatory  AEOI  has  been  expanded  three  times  through  amendments  to  the 
Directive. Thereby, AEOI of financial account data, namely dividends, interests, other capital 
income,  gross  proceeds  as  well  as  the  account  balance,  started  in  September  2017  (DAC2), 
AEOI of advance cross-border tax rulings and advance pricing agreements (APA) by July 2017 
(DAC3),  and  Country  by  Country  on  reporting  of  multinational  enterprises  in  2018  (DAC4). 
The AEOI on advance cross-border tax rulings will provide the Member States with details on 
arrangements made between tax authorities and taxpayers in the EU that may have an impact 
on their tax base. It is based on the use of a central depository administered by the Commission 
where  all  Member  States  can  access  the  information  uploaded  by  any  other  Member  State. 
Thus, it is a different procedure from the standard AEOI that concerns "bulk" data on income 
and assets exchanged via secured channels bilaterally between Member States. 

7. 

SPONTANEOUS EXCHANGE OF INFORMATION (ARTICLES 9-10) 

Categories covered by spontaneous exchange of information (SEOI) include information which 
may be relevant for another Member State's administration and enforcement of the domestic tax 
laws  for  avoiding  double  taxation  or  double  non  taxation,  and  for  preventing  profit  shifting. 
Furthermore,  Member  States  may  inform  each  other  of  any  information  of  which  they  are 
aware and which they consider may be useful for the tax authorities of other Member States.  

Since  2013  all  Member  States  have  sent  information  spontaneously  :  overall  around  70,000 
SEOI  exchanges have taken place between Member States. In  the below chart the number of 
SEOI in 2014 reflects a special project carried out between two Member States. 

Picture 6:  Total number of SEOI sent per year 

No evidence is available to assess the timeliness of information sent, i.e. whether information 
was sent at the latest one month after it became available. Awareness in the Member States is 
raised through  internal guidance  on  administrative  cooperation  on  tax matters,  training  to  tax 
auditors and internal time limits to report the information to the competent authority in charge 
of sending the spontaneous information.  

8 

 
 
 
 
Information  exchanged  spontaneously  usually  covered:  employment  (dependent  work)  details 
not  covered  in  AEOI,  payments,  business  transactions,  other  incomes  and  in  the  recent  years 
cross-border tax rulings and advance pricing arrangements (APAs). However, the items listed 
above cannot be considered exhaustive because not all Member States keep records of the type 
of information exchanged spontaneously.  

Generally,  all information  provided  spontaneously  should  be  effective as  it is  selected  by  tax 
officials  relying  on  their  own  practical  experience  and  expertise  in  tax  collection.  Member 
States  rated  spontaneous  exchange  of  information  as  most  effective  in  the  following  fields: 
employment,  business 
tax 
information. Since the Commission proposed for DAC3, it is noteworthy that the spontaneous 
exchange  of  tax  rulings  and  APAs  increased  with  special  reference  to  Luxembourg  and  the 
Netherlands as sending Member States and Germany, France and the Netherlands as receiving 
Member States.  

independent  activities  and  general 

transactions,  payments, 

It  was  evident  that  the  objective  of  ensuring  that  all  Member  States  receive  sufficient 
information  on  tax  rulings  and  APAs  could  not  be  achieved  through  non-coordinated  action 
implemented  by  each  Member  State  individually  on  the  basis  of  SEOI.  Nor  did  the  Model 
Instruction  issued  in  2013  following  a  Code  of  Conduct  recommendation  in  2012 lead to  the 
exchanges of rulings. The exchange of information on cross-border tax rulings that may affect 
the  tax  bases  of  more  than  one  Member  State  required  a  common  and  compulsory  approach 
through an action at Union level (DAC3), ensuring tax transparency and effective cooperation 
between  tax  administrations  in  fighting  tax  avoidance.  Picture  7  highlights  the  effects  of  this 
action. 

Picture 7: Total number of cross-border rulings and APAs sent/received per year 

8. 

PRESENCE  AND  PARTICIPATION  IN  ADMINISTRATIVE  ENQUIRIES 
(ARTICLE 11) 

This  particular  form  of  cooperation  is  designed  to  support  the  effective  monitoring  of 
procedures in cross-border transactions and the correct assessment and collection of taxes due 

9 

 
 
 
for cross border activities.  In a single market where taxpayers can operate without borders, tax 
authorities need to "cross" the borders as well. In addition to being present, officials may gather 
information by interviewing individuals and examining documents if allowed under the laws of 
the  Member  State  which  they  are  visiting.  The  national  legislation  differs  significantly  with 
regard to allowing visiting officials to interview individuals and examine records. Only in just 
over half of the Member States (15) are such actions allowed. 5  

Since  the  entry  into  force  of  the  Directive,  Member  States  (Austria,  Belgium,  Cyprus, 
Germany,  Denmark,  Estonia,  Finland,  Hungary,  Ireland,  Italy,  Latvia,  Netherlands  and 
Sweden)  have  increased  the  use  of  this  provision  mainly  with  neighbouring  countries:  32  in 
2013,  32  in  2014,  87  in  2015  and  62  in  2016.  The  tool  is  used  mainly  in  relation  to  tax 
residence,  the  existence  of  a  permanent  establishment,  transfer  pricing,  and  letterbox 
companies. The Fiscalis 2020 Programme finances the presence of officials in other countries' 
offices and their participation in administrative enquiries.  

9. 

SIMULTANEOUS CONTROLS (ARTICLE 12) 

The tax situation of one or more persons or related parties liable to tax established in several 
Member States is often of common or complementary interest. In those cases, Member States 
may  agree  to  conduct  simultaneous  tax  controls,  in  their  own  territory,  of  one  or  more 
taxpayers  of  common  or  complementary  interest  to  them.  After  controls  are  concluded, 
Member  States  exchange  the  information  they  have  collected.  The  meetings  of  tax  officials 
involved in simultaneous controls are financed by the Fiscalis 2020 Programme.  

Member  States  acknowledge  the  effectiveness  of  this  instrument  and  are  generally  satisfied 
with  its  functioning.  Since  the  entry  into  force  of  the  Directive,  all  Member  States  except 
Bulgaria  and  Romania  have  either  initiated  or  taken  part  to  simultaneous  controls.  Overall  a 
total number of 119 simultaneous controls have been initiated by the Member States although 
more than two Member States may be involved in a simultaneous control. The controls mainly 
relate to transfer pricing issues. 

Member States  claim some obstacles in including these initiatives in  established annual audit 
planning  programmes,  due  also  to  the  difficulty  in  convincing  management  of  the  value  in 
investing in audits that may apparently show a benefit only for the Member States initiating the 
control. 

Action  19  of  the  2012  Action  Plan  to  strengthen  the  fight  against  tax  fraud  and  tax  evasion6 
stressed  the  link  between  promoting  the  use  of  simultaneous  controls  and  the  presence  of 
foreign officials as well as the possibility of having joint audits7 in the future. 

5   The allowance may depend on the taxpayer's acceptance or on an agreement between the requesting authority 

and the requested authority upon reciprocity. 

6        Communication  from  the  Commission  to  the  European  Parliament  and  the  Council:  An  Action  Plan  to 
strengthen the fight against tax fraud and tax evasion. COM/2012/0722 final.  
7   The  OECD  describes  a  joint  audit  as  two  or  more  countries  joining  together  to  form  a  single  audit  team  to 
examine an issue(s) / transaction(s) of one or more related taxable persons (both legal entities and individuals) 
with  cross-border  business  activities,  perhaps  including  cross-border  transactions  involving  related  affiliated 
companies  organized  in  the  participating  countries,  and  in  which  the  countries  have  a  common  or 
complementary  interest;  where  the  taxpayer  jointly  makes  presentations  and  shares  information  with  the 

10 

 
 
                                                 
In  addition,  in  2016  the  Fiscalis  Project  Group  on  joint  audits8  concluded  that:  "a  joint  audit 
gives  the  widest  extent  of  administrative  cooperation  and  may  result  in:  agreed  facts,  agreed 
outcomes,  a  common  approach, a  common  understanding,  greater certainty  for  taxpayers and 
administrations,  leading  to  correct  taxation.  The  project  group  recognised  that  there  will  be 
operational issues and challenges to resolve, but as a starting point a joint audit function cannot 
work effectively without a legal framework to support it."  

10. 

ADMINISTRATIVE NOTIFICATION (ARTICLE 13) 

The  Directive  lays  down  procedures  for  Member  States  to  request  another  Member  State  to 
issue  a  notification  of  any  instrument  and  decision  concerning  the  application  in  its  own 
territory of legislation on taxes covered by the Directive, as for instance notice of assessment to 
taxpayers.  

Since  the  entry  into  force  of  the  Directive  all  Member  States  have  received  requests  for 
notification. Overall 1,137 requests for notification have been sent: 223 in 2013, 233 in 2014, 
258 in 2015 and 423 in 2016. 

Notification works well and smoothly in practice with the exception of very few cases where 
the taxpayer could not be traced or the company was dissolved. Some complaints have come 
from taxpayers who received notifications, including documents, in other languages. Currently 
an excel file is being used for this purpose and some Member States ask for a dedicated e-Form 
to be integrated in the current IT tool. 

11. 

FEEDBACK (ARTICLE 14)  

The feedback requested after an exchange of information on request or spontaneously has to be 
given  as  soon  as  possible  and  no  later  than  three  months  after  the  outcome  of  the  use  of  the 
information is known.  

Feedback is considered a motivating factor for tax auditors providing a reply to a request for 
information  or  identifying  situations  of  interest  for  another  Member  State.  Feedback  could 
therefore enhance the quality of information provided.  

Member  States  consider  feedback  provided  on  the  results  achieved  with  spontaneous 
information received as particularly important. It enables to identify what types of spontaneous 
exchanges  might  have  fiscal  impact  in  other  Member  States  and,  therefore,  to  make  a  better 
estimation of the information that could be relevant and a better use of the resources available. 

The  bilateral  feedback  on  AEOI  under  Article  8(1)  is  mandatory  for  the  Member  States  and 
shall  be  sent  once  a  year  in  accordance  with  practical  arrangements  agreed  upon  bilaterally. 
Feedback concerning possible technical errors that would prevent the receiving Member State 
to use the information is the most important way to improve the national collection methods of 
tax data. In discussions with Member States it has been identified that there is a need to develop 
national  feedback  processes,  not  only  within  tax  administrations  but  also  between  tax 

countries, and the team includes Competent Authority representatives from each country - Joint Audit Report, 
OECD, FTA September 2010 

8    Group's details in the Register of Commission Expert Groups: F2020 FPG/049 - Project group on Joint Audits.  

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administrations and their national reporters, such as banks, employers and pension companies. 
Feedback is one of the key tools for improving the overall quality of AEOI data in the long run.       

12. 

SHARING OF BEST PRACTICES AND EXPERIENCES (ARTICLE 15)  

According  to  the  Directive,  Member  States,  together  with  the  Commission,  have  to  examine 
and  evaluate  administrative  cooperation  and  share  their  experience,  in  order  to  improve 
administrative  cooperation  and  develop  it  further.  This  provision  is  especially  important  at 
present: Member States and Commission are facing new challenges in implementing this new 
legal  base  and  in  meeting  the  need  of  adapting  the  existing  systems  and  finding  practical 
solutions that can be shared by all Member States.  

The main forum where the Commission and Member States meet to discuss common issues and 
identify  best  practices  related  to  the  practical  implementation  of  the  Directive  is  the  Expert 
Group on Administrative cooperation in the field of direct taxation (EG ACDT)9.  

Furthermore, specific workshops and project groups financed by the Fiscalis Programme have 
been set up in order to gather experts from the Member States on specific topics with the aim of 
having  a  better  cooperation  among  themselves  and  with  the  Commission,  and/or  to  develop 
concrete outputs10.  

13. 

DISCLOSURE  OF  INFORMATION  AND  DATA  PROTECTION  (ARTICLES 
16 AND 25)  

Effective  administrative  cooperation  is  based  on  reciprocity  and  confidentiality  between 
competent  authorities.  The  Article  on  the  disclosure  of  information  and  documents  is  more 
detailed  than  in  the  Mutual  Assistance  Directive  ("MAD")  of  1977,  and  the  intention  was  to 
propose a broad approach for the disclosure while at the same time it was aimed to protect both 
the Member State and taxpayers' interests. As a general rule Member States have to keep secret 
the information  exchanged,  use  it  only  for the purposes specified in  the  Directive and  ensure 
data exchanged are protected. Since the entry into force of the Directive, there is no evidence of 
any breach of secrecy and/or data protection provisions. 

The received data may be used to assess and recover taxes mentioned in the Directive, but also 
to assess and enforce other taxes and duties, or compulsory social security contributions. 
Some Member States have reported having used the information for these secondary purposes. 

Half  of  the  Member  States  have  used  information  received  from  other  Member  States  in 
connection with judicial and administrative proceedings related to infringement of tax law and 
proceedings  that  may  involve  penalties.  The  frequency  of  this  kind  of  use  has  however  been 
quite low if it is considered on an annual basis; in 2016 usually for 1 to 5 cases per Member 
State, although one Member State reported as many as 20 to 50 cases. 

9 

http://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetail&groupID=1711&NewSearc
h=1&NewSearch=1 

10   Some  examples  of  output:  administrative  practices  in  place  within  each  country  as  regards  administrative 
cooperation in the field of taxation, bilateral feedback, risk management guidelines on the use of AEOI data 
and yearly assessment questionnaire. 

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If the Member State that sends the information allows so nationally, information may be used 
for  other  purposes.  Permission  has  been  asked  for  the  use  of  information  that  was  usually 
related to anti-money laundering, other economic or financial crimes, other criminal cases, for 
other public authorities (e.g. statistical purposes) and bookkeeping crime procedures. Member 
States  have  granted  the  permission  whenever  national  legislation  allows  use  for  similar 
purposes in domestic cases. Normally, granting permission requires a case-by-case analysis. 

Member  States  may  transmit  information  received  from  another  Member  State  to  a  third 
Member State. In 2013, only one Member State reported having done so, whereas, in 2016, 7 
Member States transmitted information likely to be useful to a third Member State.  

14. 

STANDARD  FORMS  AND  COMPUTERISED  FORMATS,  PRACTICAL 
ARRANGEMENTS (ARTICLES 20-21)  

Electronic standard forms for the practical implementation of administrative cooperation were 
developed  together  with  Member  States  in  order  to  make  the  exchanges  more  efficient  and 
user-friendly. The forms were structured in a way that all necessary information to identify the 
taxpayer and to process the exchange has to be provided, including the tax purpose for which 
the  information  is  sought.  The  eFDT  application  (electronic  forms  in  direct  taxation) 
containing  the  forms was deployed nationally and frequent  updates have  been  provided since 
implementation  on  1  January  2013.  The  Commission  is  currently  working  on  a  central  web 
application for the exchange of the electronic forms. Member States are very satisfied with the 
use of the electronic standard forms.  

For  AEOI  under  Art.  8(1),  the  standard  computerized  format  was  based  on  data  exchange 
format of Directive 2003/48/EC on taxation of savings income in the form of interest payments. 
The Commission and the Member States constructed the format to cover several details about 
the first five categories needed in  each  Member  State for tax purposes. For AEOI  on foreign 
financial account data under Art. 8(3a), or other tax transparency related AEOI under Art. 8a 
and 8aa, the exchange format is based on a global standard developed at OECD.    

The  exchange  of  information  is  performed  in  a  secure  way  by  using  the  Common 
Communication Network secure system, the CCN-mail. In case of request for notification or in 
case there are voluminous documents to be sent together with a reply Member States may use 
regular mail.  

15. 

RELATIONS WITH THIRD COUNTRIES (ARTICLE 19) 

Article 19 of the Directive enhances the cooperation by introducing an obligation for a Member 
State  to  provide  to  any  other  Member  State  the  widest  cooperation  it  maintains  with  a  third 
country. Since 2013 no exchanges took place under this provision.  

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