Proposal for a COUNCIL DIRECTIVE amending Directive 2011/16/EU to address the urgent need for deferring certain time limits for the filing and exchange of information in the field of taxation due to the COVID-19 pandemic
Date: 2020-05-08
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: European tax cooperation, administrative cooperation, cross-border cooperation, epidemic, exchange of information, fraud, infectious disease, tax avoidance, tax evasion

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   EUROPEAN COMMISSION  Brussels, 8.5.2020  COM(2020) 197 final 2020/0081 (CNS)  Proposal for a COUNCIL DIRECTIVE amending Directive 2011/16/EU to address the urgent need for deferring certain time limits for the filing and exchange of information in the field of taxation due to the COVID-19 pandemic  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The COVID-19 outbreak is a severe public health crisis which has affected all Member States. 
It  poses  a  major  challenge  for  public  health  care  systems  and  is  likely  to  have  severe 
implications for the Union’s economies for an extended period of time. This situation creates 
an overwhelming disruption in the life of citizens and businesses, who struggle to carry out 
their activities due notably to the constraints linked to the lockdowns in many Member States.  

In light of these unprecedented circumstances, a number of Member States and persons liable 
to  report  information  under  Council  Directive  2011/16/EU  of  15  February  2011  on 
administrative  cooperation  in  the  field  of  taxation1  have  requested  the  deferral  of  certain 
deadlines for the filing and exchanging of information under this Directive. More specifically, 
the requests for deferral pertain to automatic exchanges of information on financial accounts 
of  which  the  beneficiaries  are  tax  resident  in  another  Member  State2  and  reportable  cross-
border arrangements3 that feature in Annex IV to Council Directive 2011/16/EU. The severe 
disruption  caused  by  the  COVID-19  pandemic  hampers  the  timely  compliance  of  financial 
institutions and of the persons liable to report cross-border arrangements and affect negatively 
the capacity of Member States’ tax administrations to collect and process the data. 

This  situation  requires  an  urgent  and  coordinated  response  within  the  Union  and  where 
relevant at global level. In this regard, it would be useful to take into account the initiative of 
the Steering Group of the Global Forum with respect to the common reporting standard (CRS) 
for  Reporting  Financial  Institutions,  the  latter  being  transposed  in  Union  law  via  Council 
Directive (EU) 2014/107. 

It  is  therefore  necessary  to  defer  the  deadline  for  the  exchange  of  information  on  financial 
accounts  of  which  the  beneficiaries  are  tax  resident  in  another  Member  State.  This  would 
accordingly  allow  Member  States  to  adjust  their  national  deadlines  for  the  filing  of  such 
information by the Reporting Financial Institutions. In the same vein, the deadlines for filing 
and  exchanging  information  on  cross-border  arrangements  under  Annex  IV  of  Council 
Directive 2011/16/EU should also be extended. 

Meanwhile, it should also be recalled that the exchange of information on financial accounts 
of which the beneficiaries are tax resident in another Member State and on reportable cross-
border arrangements under Annex IV to Council Directive 2011/16/EU is crucial in the fight 
against tax avoidance and tax evasion in the Union. Member States will need tax revenues to 
finance  their  considerable  efforts  to  contain  the  negative  economic  impact  of  the  measures 
against the COVID-19 pandemic. Ensuring tax fairness by preventing tax avoidance and tax 
evasion  becomes  more  important  than  ever.  While  the  current  crisis  calls  for  adjusting  the 
calendar  for  filing  and  transmitting  some  tax  data,  it  should  not  lead  to  relinquishing  the 
efforts of national administrations for ensuring fair taxation. 

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OJ L 64, 11.3.2011, p. 1. 
Council  Directive  (EU)  2014/107  of  9  December  2014  amending  Directive  2011/16/EU  as  regards 
mandatory automatic exchange of information in the field of taxation (OJ L 359, 16.2.2014, p. 1). 
Council  Directive  (EU)  2018/822  of  25  May  2018  amending  Directive  2011/16/EU  as  regards 
mandatory  automatic  exchange  of  information  in  the  field  of  taxation  in  relation  to  reportable  cross-
border arrangements (OJ L 139, 5.6.2018, p. 1–13). 

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The  length  of  the  deferral  should  not  disrupt  the  established  structure  and  functioning  of 
Council Directive 2011/16/EU. Rather, it should be of limited duration, in proportion to the 
practical difficulties caused by a temporary lockdown aiming at containing the pandemic.  

Considering  the  current  uncertainty  about  the  evolution  of  the  COVID-19  pandemic,  it  is 
useful to provide for the possibility of one further extension of the deferral period for filing 
and  exchanging  information.  This  would  be  necessary  if  during  part  or  all  of  the  period  of 
deferral,  the  exceptional  circumstances  of  severe  risks  for  public  health  caused  by  the 
COVID-19  pandemic  persist  and  Member  States  have  to  either  implement  new  or  continue 
existing lockdown measures. Such extension should not disrupt the established structure and 
functioning  of  Council  Directive  2011/16/EU.  Rather,  it  should  be  of  a  limited  and  pre-
determined  duration  in  proportion  to  the  practical  difficulties  caused  by  the  temporary 
lockdown. The extension should not affect the essential elements of the obligation to report 
and  exchange  information  under  this  Directive.  It  may  merely  extend  the  deferral  of  the 
deadline  for  complying  with  such  obligations  while  ensure  that  no  information  remains 
without eventually being exchanged. 

• 

Consistency with existing policy provisions in the policy area 

Since the beginning of the COVID-19 outbreak, the Commission has received a considerable 
number  of  questions  and  requests  and  has  embarked  on  a  number  of  initiatives  in  order  to 
mitigate  the  impact  of  the  crisis.  In  this  context,  DG  TAXUD  has  already  taken  several 
decisions, mainly in the area of Customs and VAT, in order to urgently resolve problems or at 
least  provide  reassurance.  These  are  summarized  on  the  TAXUD  website  (COVID-19 
TAXUD response4). 

The  proposed  initiative  is  consistent  with  the  measures  adopted  by  the  Commission  to  take 
into  account  the  exceptional  present  difficulties  faced  by  businesses  and  national  tax 
administrations.  It  responds  to  the  requests  made  by  a  number  of  persons  liable  to  file 
information  under  Council  Directive  2011/16/EU  and  by  Member  States  for  deferring  the 
time limits for filing and exchanging information under Council Directive 2011/16/EU.  

The proposed initiative is also aligned with that of the Steering Group of the Global Forum 
concerning  the  CRS  for  Reporting  Financial  Institutions  to  extend  the  deadline  for  the 
exchange of information from the end of September 2020 to the end of December 2020. 

The Council also organised an informal meeting with Member States on 29 April 2020 where 
all  Member  States  agreed  on  the  need  to  defer  the  filing  and  exchange  of  information 
requirements under Council Directive 2011/16/EU. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Articles  113  and  115  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU) 
constitute the legal base of this legislative initiative. Most initiatives linked to harmonising or 
coordinating  the  legal  framework  in  the  field  of  direct  taxation  rely  on  Article  115  TFEU, 
whilst indirect tax is dealt with under Article 113 TFEU. The proposed rules aim at amending 
the specific time limits for filing and exchanging certain information (information on financial 
accounts  and  reportable  cross-border  arrangements),  to  take  into  account  the  current 
difficulties in complying with the obligations under Council Directive 2011/16/EU due to the 

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https://ec.europa.eu/taxation_customs/covid-19-taxud-response_en 

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COVID-19  crisis.  Considering  that  reportable  cross-border  arrangements  may  relate  to  both 
direct and indirect tax schemes, both legal bases are relevant to the proposed rules. 

• 

Subsidiarity (for non-exclusive competence)  

The  proposal  fully  observes  the  principle  of  subsidiarity  as  set  out  in  Article  5  TFEU.  It 
addresses  administrative  cooperation  in  the  field  of  taxation.  Legal  certainty  and  clarity  for 
the application of the deferral of certain deadlines under the Directive can only be ensured if 
there is a coordinated approach to the identified problem across Member States. 

• 

Proportionality 

The proposal consists of adjusting existing provisions of the Directive regarding the deadlines 
applicable for the filing and exchange of certain information, in order to address challenges 
that persons liable to report information and tax administrations are facing due to the current 
COVID-19  outbreak.  The  adjustments  do  not  go  beyond  what  is  necessary  to  achieve  the 
objective of administrative cooperation between Member States. They provide for a deferral, 
which takes into account the length of confinement/ lockdown measures, and ensure that no 
information which becomes reportable during the period of deferral will be left unreported or 
without being exchanged. 

• 

Choice of the instrument 

The  legal  base  for  this  proposal (Article  115  TFEU)  lays  down  explicitly  that  legislation  in 
this field may only be enacted in the legal form of a Directive.  

The  proposed  Directive  also  constitutes  the  sixth  amendment  to  Council  Directive 
2011/16/EU  and  follows  Council  Directives  (EU)  2014/107/EU,  2015/2376,  2016/881, 
2016/2258 and 2018/822. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Fundamental rights 

This  Directive  respects  the  fundamental  rights  and  observes  the  principles  recognised  in 
particular by the Charter of Fundamental Rights of the European Union. 

4. 

DETAILED  EXPLANATION  OF  THE  SPECIFIC  PROVISIONS  OF  THE 
PROPOSAL 

The Directive proposes changes to certain time limits for filing and exchanging information 
under  Council  Directive  2011/16/EU,  more  specifically  concerning  information  on financial 
accounts  as  provided  by  Council  Directive  2014/107/EU  and  reportable  cross-border 
arrangements as provided by Council Directive 2018/822/EU. 

The proposed rules: 

 

 

Defer the time limit for exchanges of information on Reportable Financial Accounts 
by 3 months, i.e. until 31 December 2020; 

Change  the  date  for  the  first  exchange  of  information  on  reportable  cross-border 
arrangements  that  feature  in  Annex  IV  to  Council  Directive  2011/16/EU  from  31 
October 2020 to 31 January 2021; 

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 

 

Change the date for the beginning of the period of 30 days for reporting cross-border 
arrangements  which  are  included  in  Hallmarks  listed  in  Annex  IV  to  Council 
Directive 2018/822/EU from 1 July 2020 to 1 October 2020; 

Change  the date  for the reporting  of  the ‘historical’  cross-border  arrangements  (i.e. 
arrangements  that  became  reportable  from  25  June  2018  to  30  June  2020)  from  31 
August 2020 to 30 November 2020. 

Considering the current uncertainty regarding the evolution of the COVID-19 pandemic, the 
proposed  initiative  provides  for  the  possibility  of  extending  once  the  deferral  period  for  the 
filing  and  exchange  of  information.  The  Commission  will  be  empowered  to  give  such 
extension by way of delegated acts. 

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2020/0081 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2011/16/EU to address the urgent need for deferring certain time 
limits for the filing and exchange of information in the field of taxation due to the 
COVID-19 pandemic 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 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 Parliament5, 
Having regard to the opinion of the European Economic and Social Committee6, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

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The  lockdown  measures  imposed  by  Member  States  to  help  contain  the  COVID-19 
pandemic  have  an  important  disruptive  effect  on  the  capacity  of  businesses  and  tax 
administrations  to  carry  out  some  of  their  obligations  under  Council  Directive 
2011/16/EU7. 

A number of Member States and persons liable to report information to the competent 
authorities of Member States under Directive 2011/16/EU have requested the deferral 
of  certain  time  limits  laid  down  in  that  Directive  for  automatic  exchanges  of 
information on financial accounts of which the beneficiaries are tax resident in another 
Member  State,  as  well  as  on  reportable  cross-border  arrangements  included  in  the 
Hallmarks listed in Annex IV to that Directive8. 

The severe disruption caused by the COVID-19 pandemic in the activity of financial 
institutions  and  of  the  persons  who  are  liable  to  report  cross-border  arrangements 
hampers  the  timely  compliance  with  their  reporting  obligations  under  Directive 
2011/16/EU.  Financial  institutions  are  currently  faced  with  urgent  tasks  related  to 
COVID-19. Furthermore, financial institutions and the persons liable to report cross-
border  arrangements  included  in  the  Hallmarks  listed  in  Annex  IV  are  faced  with 
several  work-related  disruptions,  primarily  due  to  the  remote  working  conditions 

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  (EU)  2018/822  of  25  May  2018  amending  Directive  2011/16/EU  as  regards 
mandatory  automatic  exchange  of  information  in  the  field  of  taxation  in  relation  to  reportable  cross-
border arrangements (OJ L 139, 5.6.2018, p. 1). 

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(4) 

(5) 

(6) 

(7) 

(8) 

because  of the lockdown in  most  Member States. Similarly, the capacity of Member 
States’ tax administrations to collect and process the data is negatively affected. 

This situation requires an urgent and coordinated response within the Union. For this 
purpose,  it  is  necessary  to  defer  the  time  limit  for  the  exchange  of  information  on 
financial accounts of which the beneficiaries are tax resident in another Member State 
in  order  to  allow  Member  States  to  adjust  their  national  time  limits  for  the  filing  of 
such  information  by  the  Reporting  Financial  Institutions.  In  the  same  vein,  the  time 
limits for filing and exchanging information on cross-border arrangements included in 
the Hallmarks listed in Annex IV to Directive 2011/16/EU should also be extended. 

In  order  to  determine  the  length  of  the  deferral,  it  is  necessary  to  consider  that  this 
aims  to  address  an  exceptional  situation  and  should  not  disrupt  the  established 
structure  and  functioning  of  Directive  2011/16/EU.  Consequently,  it  would  be 
appropriate  to  limit  the  deferral  to  a  duration  that  is  proportional  to  the  difficulties 
caused by the COVID-19 pandemic for filing and exchanging information. 

Considering the current uncertainty about the evolution of the COVID-19 pandemic, it 
would  also  be  useful  to  provide  for  the  possibility  of  one  further  extension  of  the 
deferral period for the filing and exchange of information. This would be necessary if 
during  part  or  all  of  the  period  of  deferral,  the  exceptional  circumstances  of  severe 
risks for public health caused by the COVID-19 pandemic persist and Member States 
have to either implement new or continue existing lockdown measures. Such extension 
should  not  disrupt  the  established  structure  and  functioning  of  Council  Directive 
2011/16/EU.  Rather,  it  should  be  of  a  limited  and  pre-determined  duration  in 
proportion  to  the  practical  difficulties  caused  by  the  temporary  lockdown.  The 
extension  should  not  affect  the  essential  elements  of  the  obligation  to  report  and 
exchange  information  under  this  Directive.  It  may  merely  extend  the  deferral  of  the 
time  limit  for  complying  with  such  obligations  while  ensure  that  no  information 
remains without eventually being exchanged. 

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

Considering  that  the  measures  laid  down  in  this  Directive  concern  obligations  laid 
down  in  Directive  2011/16/EU  which  would  otherwise  become  applicable  within  a 
short period of time, this Directive should enter into force as a matter of urgency, 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 

Directive 2011/16/EU is amended as follows: 

(1) 

Article 8ab is amended as follows: 

(a) 

paragraph 12 is replaced by the following: 

‘12.  Each  Member  State  shall  take  the  necessary  measures  to  require 
intermediaries  and  relevant  taxpayers  to  file  information  on  reportable 
cross-border  arrangements  the  first  step  of  which  was  implemented 
between  25  June  2018  and  30  June  2020.  Intermediaries  and  relevant 
taxpayers, as appropriate, shall file information on those reportable cross-
border arrangements by 30 November 2020.’; 

(b)  paragraph 18 is replaced by the following: 

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‘18.  The  automatic  exchange  of  information  shall  take  place  within  one 
month of the end of the quarter in which the information was filed. The 
first information shall be communicated by 31 January 2021.’. 

(2) 

The following Articles are inserted: 

‘Article 27a 
Deferral of time limits in response to COVID-19 

1.  Notwithstanding  the  time  limit  laid  down  in  point  (b)  of  Article  8(6),  the 
communication  of  information  laid  down  in  Article  8(3a)  that  relates  to 
calendar  year  2019  or  other  appropriate  reporting  period,  shall  take  place 
within 12 months following the end of calendar year 2019 or other appropriate 
reporting period.  

2.  Where  a  reportable  cross-border  arrangement 

is  made  available  for 
implementation,  or  is  ready  for  implementation,  or  where  the  first  step  in  its 
implementation has been made between 1 July 2020 and 30 September 2020, 
or  where  intermediaries  referred  to  in  the  second  paragraph  of  point  21  of 
Article  3  provided,  directly  or  by  means  of  other  persons,  aid,  assistance  or 
advice between 1 July 2020 and 30 September 2020, the period of 30 days for 
filing information laid down in paragraphs 1 and 7 of Article 8ab shall begin by 
1 October 2020. 

In the case of marketable arrangements, the first periodic report in accordance 
with Article 8ab(2) shall be made by the intermediary by 31 January 2021. 

Article 27b 
Extension of the period of deferral 

The  Commission  shall  be  empowered  to  adopt  a  delegated  act,  in  accordance  with 
Article  27c,  in  order  to  extend  the  period  of  deferral  for  filing  and  exchanging 
information,  as  provided  for  in  paragraphs  12  and  18  of  Article  8ab  and  in  Article 
27a, for a maximum of 3 additional months.  

The  Commission  may  only  adopt  the  delegated  act  mentioned  in  the  first 
subparagraph  if  during  part  or  all  of  the  period  of  deferral,  the  exceptional 
circumstances  of  severe  risks  for  public  health  caused  by the  COVID-19  pandemic 
persist and Member States have to implement lockdown measures. 

Article 27c 
Exercise of delegation 

1. 

2. 

3. 

The  power  to  adopt  the  delegated  act  referred  to  in  Article  27b  shall  be 
conferred  on  the  Commission  subject  to  the  conditions  laid  down  in  this 
Article. 

The  power  to  adopt  the  delegated  act  referred  to  in  Article  27b  shall  be 
conferred on the Commission only for the period of deferral of the time limits 
for filing and exchanging information, as provided for in paragraphs 12 and 18 
of Article 8ab and in Article 27a. 

The delegation of power referred to in Article 27b may be revoked at any time 
by the Council. A decision to revoke shall put an end to the delegation of the 
power  specified  in  that  decision.  It  shall  take  effect  the  day  following  the 

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publication of the decision in the Official Journal of the European Union or at a 
later date specified therein. It shall not affect the validity of the delegated act if 
already in force. 

4. 

Before  adopting  the  delegated  act,  the  Commission  shall  consult  experts 
designated by each Member State in accordance with the principles laid down 
in the Inter-institutional Agreement on better law making of 13 April 2016. 

5.  As  soon  as  it  adopts  the  delegated  act,  the  Commission  shall  notify  it  to  the 
Council.  The  notification  of  the  delegated  act  to  the  Council  shall  state  the 
reasons for the use of the urgency procedure. 

6. 

7. 

The delegated act adopted pursuant to Article 27b shall enter into force without 
delay and shall apply as long as no objection is expressed by the Council. The 
Council  may  object  to  the  delegated  act  within  five  working  days  of  the 
notification  of  that  act.  In  such  a  case,  the  Commission  shall  repeal  the  act 
immediately following the notification of the decision to object by the Council. 

The European Parliament shall be informed of the adoption of a delegated act 
by the Commission, of any objection formulated to it and of the revocation of a 
delegation of powers by the Council.’. 

Article 2 

1. 

Member  States  shall  adopt  and  publish,  by  31  May  2020  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 June 2020. 

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 day following that of its publication in the Official 
Journal of the European Union. 

Article 3 

This Directive is addressed to the Member States. 

Done at Brussels, 

Article 4 

For the Council 
The President 

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