CELEX: 51976PC0119
Language: en
Date: 1976-03-31
Title: PROPOSAL FOR A COUNCIL DIRECTIVE CONCERNING MUTUAL ASSISTANCE BY THE COMPETENT AUTHORITIES OF MEMBER STATES IN THE FIELD OF DIRECT TAXATION (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (76) 119
Vol. 1976/0039
 ---pagebreak--- Disclaimer
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concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
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file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
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(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak--- COMMISSION OT THE EUROPEAN COMMUNITIES
                                               COM(76)119 final .
                                               Brussels , 31 March 1 /76 .
                   PROPOSAL FOR A COUNCIL DIRECTIVE CONCERNING
               MUTUAL ASSISTANCE BY THE COMPETENT AUTHORITIES CF
                 MEMBER STATES IN THE FIELD CF DIRECT TAXATION
                 ( submitted to the Council "by the Commission )
   COM(75 ) 119 final .
 ---pagebreak---                            EXPLAITATOÎÎT IIEÏÎORAÎÎDT3K
GIZTERi.iL C®T£TT)EnATiaTS
1 * Tax evasion and tax avoidance reaching' "beyond the national "borders
of Member States represent a serious problem , not only nation®y "but also
at Community level# For each Member State they lead to "budgetary losses
and to "breaches in the principle of BciEc'hax^ti on , but in addition they
are likely to distort capital movements and the conditions of competition.
2.     3ecau.se of the increasing interpenetration of economies and the deve­
lopment of multinational .'companies , it is no longer possible effectively
to combat international tax evasion and avoidance merely nationally or
bilaterally ; the attack needs to be organised on as wide an international
basis as possible and, in the first place , at the Community level *
                                        ;
3 . For these reasons , on 10 February 1975 "the Council adoptea, on a pro­
posal from the Commission , a Resolution on the measures to be taken by the
Community in order to combat international tax evasion and avoidance* The
present proposal for a directive contains a first series of measures inten­
ded to fallow up the Resolution.
4,     Che attack on international tax evasion and avoidance requires above
all permanent collaboration between the tax adaini strati ons of the various
Member States , so that each, of thexa may have access to £.11 the facts and
material of U3e in correctly determining the amount chargeable to tax*
Such collaboration would , it is true , be all the more effective if all the
States wore able to employ the same for–reaching means of ascertaining
those facts. But that would require an inevitably long-term effort to har-
monise legi sls/tions* Any action which, is to bring about quick results must
therefore find its place within the limits imposed by the present differen­
ces in the structure of national laws* The present proposal accordingly
provides that collaboration between admni strati ons shall be carried out
within the conditions and limits of each Member Stated existing legisla­
tion*
 ---pagebreak--- 5.     The present proposal for a directive is restricted to the field of
direct taxes , in which the Member States already have experience of co­
operation under double taxation agreements . Similar action is needed for
indirect taxes , especially value added tax# The Commission has. begun the.
work needed for this and it intends to submit a proposal to . the
Council as soon as possible®     •      , 1 .
6#     Host of the double taxation agreements which have been concluded
between almost all Member States contain articles providing for bilateral
co-operation. The present proposal will not make these provisions redundant
Where such an Sfcrticle goes further than the provisions of the proposal ,
it will continue to be applied* But these will be exception?! cases# In
general , the proposed provisions strengthen and expand the exchange of
information and the mutual assistance procedures in a Community setting
and establish them in situations which are not even envisaged in the Ml ap-
teral conventions ,
7»     Since tax evasion and avoidance are always assuming new forms , it is
important
\
            that any action taken at• the Community level shall be capable
                                                                       "*
of adaptation to changes in circumstances and to the experience which the
tax administrations tall gain with increasing co–operation "between Member
States, This need to create permanent opportunities for adaptation and
development finds expression in the proposal in two ways. In the first
place , permanent collaboration between the Hember States and the Commis­
sion is provided, not only to review the working of the co-operation pro­
cedures set up under the proposal but also to take advantage of the expe­
rience gained , with a view to improving the co-operation procedures and
 to-3 formulating new measures if need arises. In the second plaoe , the
 structure of the proposal for a directive is itself very elastic,
8,     The provisions of the proposal fall , in fact , into two' complementary
categories. First there are the binding provisions , which oblige all the
Hember States to observe certain rules concerning the supply of information
and the carrying out of enquiries in clearly defined circumstances,
   Sercou.diy •»* * there are provisions of an optional nature , permitting
an almost a la carte extension of certain co-operation measures. In con­
sidering if or to what extent it will make use of these "'opportunities for
 ---pagebreak--- going Leyend the obligatory requirements , each Member State will have to "
consider whether the procedure in question is really useful in the circum­
stances of its own bilateral relationships and whether it can be adopted
within the S.tate 's constitutional or legislative framework.
9.        The amount of information exchanged under the provisions of this
proposal is likely to be much greater than under previous arrangements . For
this reason , it is very important to preserve the rights of taxpayers and
to taJce the greatest precautions to ensure that information passed from
one State to another is not divulged to unauthorised persons . The Commis­
sion' s proposal lays doxm very strict rules to cafeguard the confidential
character uf the information and to ensure that it can only be used for
the purpose laid down.                     '•
10.       It is not impossible that the introduction of measures for a wider
exchange of information between the tax administrations will bring about an
increase in the number .of cases where there is double taxation , especially
in the field of transfer pricing within groups   of companiesj information
obtained in this way might lead a Member State   to increase the taxable pro-,
fits of an enterprise without the other Member   State calving a corresponding
adjustment . In order to deal with this problem  the Commission will , after
the usual consultations , submit to the Council not later than July 1$"J6 a
proposal for a directive itfhich it would like to see adopted at the same
time as the present proposal .
11 .    . Although the provisions of the proposal do not regulate relations
between Member States and third countries , it is obvious that mutual as­
sistance , as a means of combatting international taxation abuses , should
not be restricted to collaboration within the Community boundaries . The
Commission is aware that it would be desirable to extend the scope of the
co-operation procedures beyond these limits and it intends to submit to
the Council , in due course , other proposals whose purpose will be to
strengthen collaboration , especially with those third countries ivhich are
important in an industrial and financial sense .
 ---pagebreak--- COIMgTTS OIT CERTAIN ARTICLES
Article 1
11 .         The first paragraph. of Article 1 lays down the principle that the
competent authorities of the Kember States shall exchange information which
is relevant in determining the correct liability to taxes on income and on
capital# The remaining paragraphs define certain essential concepts such
         * •              ,         '<                '
as " taxes on income and on capital " and " competent authorities of the Mem­
ber States".
12 .         The definition of taxes on income and on capital aims to make the
scope of "ths-! directive as broad as possible . It does not matter for which
authority these taxes are collected : it can equally well be the State '
itself , its political ©ubdivixjn© , or its local authorities.
13 .   ;; Equally the method of collection makes no difference : the tax can .
be levied by means of a direct assessment , by deduction at source or in
the form of, surcharges or " centimes additionnels".         t
Article 2
14 *         This Article deals with the exchange of information upon request .
             The purpose of paragraph 1 , second sentence , is to grant the com­
petent authority of the requested State the option of refusing to comply
with the request if that authority considers that the circumstances are
as described in that sentence . Clearly this option in no way restricts the
possibility of refusal under Article 8 .                              -
 15.         Paragraph 2 fulfils a dual role :
             – on the one hand , it requires the competent authority of the
               requested State , when that authority does not have the informa­
               tion requested at its disposal , to undertake all necessary enqui-
               ries while observing the limits set 6ut .in .Artiel® 8 ;
 ---pagebreak---       – on the other hand ,it provides the competent authorities of the Member
         States with a legal "basis , if -fehey-jreed it , :for\er:ctca-dxng £h® parens
          of enquiry they have for determining national tax liabilities so thati
         "they cover the requirements.' of" another" States         '       '
                                                              • >
 Article 3
 16 , Whereas exchange on request must relate to an actual case , automatic
 exchange invariably covers certain categories of data , such as dividends ,
 royalties ? frontier workers® pay etc *.,. , on which the competent authorities
 of the Mo-nbcr States concerned have reached prior agreement under the consul­
 tation orocedure set out in Article 9 ,
 Artide '■
17 , This Ar&aLe deals with the transmission of information otherwise than on
 request or by prior agreement as provided for in Articles 2 and 3 ,
18 , Paragraph 1 obliges the competent authorities to furnish                 information
 in the five sets of circumstances set out in sub-paragraphs a to e . The .
 possibility of extending this obligation to other cases is provided for in
 paragraph 2 , It is self–evident that , on any reasonable interpretation , the
 competent authorities are not required to transmit information which . they
 consider holds little interest for the tax administration of the other
Member Gtate . '                1
 19 , As regards sub-paragraphs a to e , the following observations should be
made :                                                                    >
         sub-p ara.^raph a : thiopprntisioii covers in a general way every case
         where there has been - an abnormal reduction in or exemption from tax ,
         even inhere , in the- absence of proof of deliberate intent by the
         taxpayer , there is no tax evasion in the strict sense of the term .;
      – sub- -paragraph b : the point to note is that it must be a case of the
 ---pagebreak---           same taxpayer in the different Member States     the case of a transfer
   < !    of profits "between associated companies is dealt with in sub–paragraph
          An area in which sub-paragraph b could often apply is that of double
          taxation treaties . It should "be emphasized that the operation of this
          provision is not confined to cases where the taxpayer attempts to gain
          improperly from the treaty : it is sufficient If the taxpayer •
       , obtain a tax advantage in one Member State which should entail a tax
          disadvantage in the other State#
       ** sub-paragraph c : the term "through one or more other countries " is
          intended to cover as widely as possible all the intermediaries who
          act in the transactions and are situated in another country , whether
          that country is a Member State or a third country#
          It can thus apply to an independent individual or legal person or
          equally well to a permanent establishment of one of the persons liable
          to tax in a Member State# Similarly , it does not matter whether the
          intermediary is subject to tax in the other oountry#
 20, The purpose of paragraph 3 is to aseSftazriLse the competent authority in
 general terms to effect a spontaneous transmission of information , in cases
 other than those covered by paragraphs 1 and 2 , wheneveyor it acquires knowledge
 of facts which ®ay be of interest to the tax administration of another Member
 State#
Article 6
 21# This Article provides a legal basis enabling the competent authority of a
"Member State      . : to authorise the presence on its territory of officials of
another Member State# The text brings out the non-compulsory character of the
provision : the competent authority of a Member State is consequently not
obliged to comply with a request from the competent authority of another
Member State#
 ---pagebreak---   Article 7
  22 , Paragraph 1 requires the competent authority to maintain secrecy concer­
  ning the information obtained from another Member State in like manner as
  for information obtained under its domestic law . Where there is a breach of
  secrecy, the penalties provided by the admini strati ve and penal code of the
  State concerned may be applied ,
, 23 , Paragraph "2 specifies the persons and authorities to whom the informa­
  tion obtained nay be divulged, as well as the purposes for which it may be
  used. The possible uses permitted by this provision are relatively circums­
  cribed, I'Jhere , however , the competent authority of the Member State which
  supplies the information considers that its use nr:;st be more restricted ,
  paragraph 3 makes it possible to enforce even stricter' secrecy,'
  24, On the "other hand, the possible uses permitted by paragraph 2 may be
  more restrictive than those allowed under the national legislation of the
  Member States concerned. In order to enable this particular drawback to be
  overcome , paragraph 4 provides a legal basis for a derogation from the pro­
  visions of paragraph -. 2 ,
  Article 8
  25, This Article refers to the limitations on exchange of information and
  on enquiries to obtain information ,
  26 , Paragraph 1 states that the competent authority is not required to
  exceed the limits set by its legislation or administrative practice rela>-
  ting to the determination of national taxes . But within these limits , the' '
  competent authority must make use of all the powers at £"ts disposal in order
  to bo in' a position to Supply the information, .                    • ■'
 ---pagebreak--- 27 •    Paragraph 2 deals with certain information which, affects the
" ordre publio"#
28. . Paragraph 3 allows information to "be withheld where the State for
which it is intended is not in a position to furnish similar information#
The competent authority of this latter Member State cannot therefore requi­
re another Member State to provide informations in its possession if its
own legislation or administrative practice does not permit a corresponding
provision of information.
Article 9
2%      In dealing with problems such as these covered by the preceding
Articles , detailed rules of application and enforcement have to be left ,
in many Gases , to bilateral agreement between the competent authorities of
the Member States concerned# There is therefore a need for a simple and
                                                                        y
efficient proced.ure vrnder which questions arising can be examined#
30#     Furthermore , the Community character of the measure requires that ,
as far as possible , it shall be uniformly applied and interpreted throughout
the Community#
 ---pagebreak--- 31.'iMS' iiifcicjo seeks to achieve these two objectives by providing - two consul–
                                          respectively ,
 tatioc procedures which operate ,/ depending on the interests involved :
      - 011 a bilateral basis , for bilateral matters j
      – on a Community basis , fox matters '-fchzrfe are not exclusively bilateral.
32. To ensure that this Community procedure can be applied equally and
 effectively , paragraph 3 requires the other Member States and the Commission
 to be notified "a posteriori " of bilateral measures in so far as they do
not deal exclusively with individual cases . This notification will enable
 each of the other Member States and the Commission to judge whether it is
 expedient to request Community consultations for the purpose of having
these measures extended to the Member States as a whole#
33 , The consultation procedure of Article 9 is free of complications and is
 effective from the ■ legale, and administrative points of Yiiew , by virtue
 of the fact that it operates directly between the competent authorities and ,
where appropriate , the fi8mnission , enabling them to talce decisions on their
 own authority.
Article 10
34* This ib3k3ei.Gst£iflisheisi permanent collaboration between the Member States
and the Commission .
35. A prime purpose of this collaboration is to follow the progress of co­
 operation between the competent authorities so as to improve it and possi­
bly enlarge its area of application.
 36 . A second function , to which explicit reference is made , concerns the
problem of transfer pricing within groups . The Article provides for all the
tax administrations to pool their experience in this field with a view to
the possible formulation of Community measures.
 ---pagebreak---   4      ^       %V" S fv\   ;.v
                                 " PROPOSAL FOR A COUNCIL DIP.ECTTVE
                   concerning mutual assistance by ths competent authorities
                          of Member States in the field of direct taxation
          THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
         having regard to the provisions of the treaty establishing the
European Economic Community and particularly Article 100 .                        ;
                                                                            » - f     '
         having regard to. the proposal of the Commission ,
         having regard to the opinion of the Economic and Social Committee ,
         having regard to the opinion of the European Parliament ,
         whereas practices of tax evasion and tax avoidance reaching beyond
national borders of Member States lead to budget losses and violations of
the principle of fair taxation and are liable to bring about distortions of
capital movements and of conditions of competition j whereas they therefore
affect the operation of the common market j                     - •       ■
         whereas the Council for these reasons adopted on 10 February 1975 a
Resolution on the measures to be taken by the Community in order to combat
international tax evasion and avoidance ;
         whereas the international nature of the problem means that national
measures , whose effect does not extend beyond State boundaries , are in­
sufficient and whereas collaboration between administrations , on the basis
of bilateral agreements , is also unable to counter new iforms of tax evasion
and avoidance , which are more and more assuming a multinational character ;
         whereas it is therefore desirable to strengthen collaboration between
tax administrations within the Community in accordance with these principles ,
under observance of common rules                    v-            " " v.-     '     ? ~i~-
1 1 ν■ ■..·· ι "         . ·                      ·
         whereas the Member States ought to supply to each other , on request ,
information concerning parfritsulak*" cases and whereas the requested State
ought to maJce the necessary enquiries to obtain this information j
 ---pagebreak---                                    - 2 -
        whereas the Kember States ought to exchange , even without request ,
ar!-r information which appears useful for the correct determination of
taxes on income or capital , in particular where there appears to "be an
artificial transfer or profits between undertakings in different Member
States or where transactions are carried out "between undertakings in two
Member States through a third country in order to obtain tax advantages ,
or where tax has been or nay be evaded or avoided for any reason whatever j
        whereas it is important that officials of the tax administration of
one Member State shall be allowed to be present in the territory of another
Member State if both the States concerned consider it desirable ;
        whereas it ought to be ensured that information transmitted in the !
course of such collaboration is not disclosed to unauthcrrised persons , so
that the basic rights and guarantees of citizens and undertakings are
safeguarded ; whereas it is therefore necessary that the Member States
receiving such information do not use it , without the authorization of
the I'enber States which supply it , other than for the purposes of taxa­
tion or to facilitate a prosecution for failure to observe the taxation
law of the receiving States ; whereas it is also necessary that the recei­
ving States afford to the information the same degree of confidentiality
which it had in the State which provided it , if that State so requires j
        whereas a Member State that is called upon to provide information
ought to have the right to refuse to do so where its legal provisions or .
administrative practice do not give its tax administration authority to
obtain or use such information for its own purposes , or vrhere the provi­
sion of such information would be contrary to public policy , or where the
State for which the information is intended would be unable , for legal or
practical reasons , to effect a similar provision of information ;
                                                                           /
                                                                         •/ •
 ---pagebreak---       whereas collaboration between the "ember States and the Commission is
necessary for the permanent - study of co-operation procedures nnd the esichasge
of experience in the fields considered , and in particular ir. the field of
the artificial transfer of profits within groups «f undertakings , with the
aim of improving those procedures and of preparing appropriate Community
             \
rules Î
      HAS ADOPTED THE PRESENT DIRECTIVE :
 ---pagebreak---                                              4 ~
                                        Article 1
                                 General Provisions
1,      The competent authority of each Member State shall in accordance with
   the provisions of this directive furnish all information that may assist
   in determining the correct liability to another Member State , s taxes on
   income and on capital to the competent authority of that Member State .
2,      There shall be regarded as taxes on income and on capital , irrespec­
   tive of the manner in which they are levied , all taxes imposed on total
   income , on total capital , or on elements of income or of capital , including
   taxes on gains from the alienation of movable or immovable property , taxes
   on the total amounts of wages or salaries paid by enterprises , as well as
   taxes on capital appreciation,
3,      The taxes referred to in paragraph 2 of this article are at present :
in Belginu : Impots des personnes physiques        – Personenbelastmg
              Impôt des" sociétés                  – Vennootschapsbelasting
              ImSt des personnes morales           – Rechtspersonenbelastiiig
              IrapSt des nou-résidents             - Delasting der r.i ct-verblijf~
                                                      houders
in Denmark : Indkomst skatten til staten
              Selskabsskat
              Ken kommunale indkomstskat
              Den amtskommunale indkorast skat
              Folkepen si onsbi dragene
              Spmands okatt en
              Den saerlige indkomstskat
              Kirkeskatten
              Formueskatten til staten              • '
              Bidrag til dagpengefonden
                                                                                  /
                                                                                •/ •
 ---pagebreak--- in Germany             KLnkommenst cii6r '
                       K'cîrperschaftstouer
                            '        ·· .  -.. κ*
                       Veraogensteuer
                       Gewerbosteuer
in Frarce              Impôt sur le revenu                   -
                        Imp3t sur les sociétés
                       Taxe professionnelle                     •'
                       Taxe foncière sur les propriétés "bâties
                       Taxe foncière sur les propriétés non bâties
in Ireland :           Income tax .
                       Corporation profits tax
                       Capital gains tax
                       Wealth tax
in Italy                Imposta sul reddito delle persone fisiche
                        Imposta sul reddito delle persone giuridiche
                        Imposta locale sui redditi
in L1 Te'~>>our£        Impôt sur le revenu des personnes phj-mques
                        Impôt sur le revenu des collectivités
                       Impôt commercial communal
                        Imp3t sur la fortune
m the Netherlands      Inkomstenbelasting
                       Vennootschapsbelasting
                       Vermogensbelasting
in the Ur-itpq ICn^om iliiooae tax
                       Corporation tax
                       Capital ,gains tax
                       Petroleum revenue tax
 ---pagebreak---                                         - 6 -
 4,      The provisions of paragraph 1 shall apply also to any identical of
    substantially similar taxes imposed subsequently , whether in addition to
    pr in place of the taxes named in paragraph 3 « The competent authorities ,
    of the Ilember States shall inform one another and the Commission whenever
. such a tax enters into force .
 r;
         The expression " competent authority" means :
    in Belgium :          De minister van financiën of een door deze aange­
                          wezen vertegenwoordiger
                          Le fciinistre des finances ou un représentant autorise
    m Denmark             Ministeren for skatter og afgifter eller oefulnaeg–
                          tigede stedf ortraeder
    m Germany i           Der Bundesminister der Finanzen oder sein Beauftragter
    in Prance   :         Le ministre de l' économie et des finances ou un
                          représentant autorisé
    in Ireland :          The Revenue Commissioners or their authorized
                          representative
    in Italy :            Il Ministro per'lerfinanze od un suo rappresentante
                          autorizzato
    in LtccemlDourg :     Le ministre des finances ou un représentant autorise
    in the ITetherlonds : De minister van ^'inanci'dii of Gen door doze aangewezen
                          vertegenwoordiger
    m the United
          ; Kingdom.-; ■  The Commissioners of Inland Revenue or their authori­
                          zed representative                              ■ .
                                                                              •A
 ---pagebreak---                                : . Erchan^ê on reauest  ;
1 * ' ' •'   The competent authority of a Meriber State shall have power to request
     the conpetent authority of another Member State to furnish information
     falling within Article 1 , paragraph 1 , in &, particular case * The competent
     authority of the requested State need not comply with the request , if it
     appears that the competent authority of the State making the request has
     not exhausted its own usual sources of information , which it could have
     utilised, according to the circumstances , to obtain the information requested
     without risk of frustrating the purpose of the enquiry.
2.           For the purpose of furnishing information referred to in paragraph 1 ,
     the competent authority of the requested Member State shall arrange for the
     conduct of any necessary enquiries , so far as may be required to obtain the
     information.
                                                               • ι
                                         Article 3
                            Automatic Sxchana-e of Information
             For particular categories of cases , determined under the consultation
     procedure laid down in Article        the competent authorities of the Member
  v States shall furnish' the information referred to in Artiole 1 , paragraph 1 ,
     without previous request and in a regular manner.
                            •            Article 4
                           Spontaneous Exchange of Information
                                              /                                <
                                                                     •> • . i
1»      •  - The competent authority of each Member State shall without previous
     request communicate the information within the scope of Article 1 , paragraph .
     1 , of which it has knowledge , to the competent authority of another Member
     State in the following circumstances j
             a) the competent authority of a Member State has grounds for suppo­
                sing that there may be a Iocs cf tax in the other Member State ;
 ---pagebreak---           "b ) a person liable to tax- secures a reduction of or an exemption from
               tasi -£n a jfcemTjir Slfate wSf'Sb-troulcl'gtvef "££s«wto an increase -in
               tax or to liability to tax for Ms in the other I-lember State \
           c) lousiness dealings between a person liable to tax in a Member State
               and a person liable to tax in another Member State are conducted
               through one or more other countries in such a way that tax saving
               nay result in one or the other Member State or in both j
           d) the competent authority of a Member State has grounds for supposing
               that a saving of tax may result from artificial transfers of profits
               within groups of enterprises j
           e) information transmitted to a Menber State . by the competent authority
               of the other Member State has resulted in the provision of informa­
               tion ifhich may be relevant in determining the liability to tax in
               that other Member State .          .
2,         The competent authorities of the Member States shall have power to extend
   the exchange of information provided for in paragraph 1 to cases other than
   those specified therein under the consultation procedure set out in Article 9«
3»         The competent authorities of the Member States shall have power to com­
   municate to each other in any other case , without previous request , any infor­
   mation within the scope of Article 1 , paragraph 1 , of which they have know­
   ledge.
                                        Avoidance of Delay
           The competent authority of the State which , by virtue of the preceding
   paragraphs , is called upon to furnish information shall do so with the least
   possible delay# If it encounters obstacles or if it refuses to furnish the
   information, it shall forthwith so inform the competent authority of the
   State concerned , indicating the nature of the obstacles or the reasons for
   the refusal .
 ---pagebreak---                                                      /
                                               - 9 -
           '
                                          . Article 6              '
                    • Coll adoration "by officials of- the State eorcemed .
             For the application of the preceding provisions , the competent autho­
     rity of the informing Member State and the competent authority of the Meaber
     State for which the information is intended shall have power to agree , xuider
     the consultation procedure laid down in Article 9 » to authorise the presence
     in the first Member State of. officials of the taxation administration of the
      other Member State. The method of application of this provision shall also
     "be determined under the abovementioned procedure*
                                                 ν
                ■                          • Article-7
                  :                           Secrecy
  1»         All information which is furnished by virtue of the foregoing provi­
      sions shall be kept secret in the State concerned in like manner as infor­
     mation received under- its domestic legislation.                              /
, 2.         Notwithstanding the provisions of paragraph 1 , in the State concerned
     the information :
     – may only be made available to such persons as are directly involved in the
       , assessment of tax or in the administrative control of assossment to tax y
     – may, apart from this , only bo made known to persons who are directly invol­
         ved in a judicial procedure for reviewing the tax assessment or in a pro­
         secution in connection with the tax assessment ; end
     – shall in no circumstances be used for purposes other than taxation*
  3.         The provisions of paragraph 2 shall not oblige a Member State whose
   • legislation lays down for domestic/ purposes narrower limits them those con–
   . tained in the provisions of that paragraph to provide information if 'the
     State concerned does not undertake to respect those narrower limits#
  4* ;       Notwithstanding' the provisions of paragraph s , the competent authori­
     ty of the informing State shall have power to permit information to "be used
  < for other purposes in the State concerned, if under the legislation of the
     informing State the information could, in similar circumstances , be used in
     the informing, State for similar purposes.
 ---pagebreak---                                             - 10 -
 5#        Where a competent authority considers that information which it has
    received from the competent authority of another Member State is likely
    to he useful to the competent authority of a third Member State , it nay ,
    with the agreement of the competent authority which supplied the infoma-
    tion , transmit it to that other competent authority.
                                        .f rficle 8
                          Linits to Er. charge of Inf ormc/hion
1.         The provisions of this directive shall impose no obligation to pro­
    vide information which the inferring State would be prevented by its legal
    provisions or administrative practice from obtaining or using for its own
    tax purposes ,
2»         The provision of information laay be refused where it would be contra­
    ry to public polie?," (" ordre public"),
3.         The competent authority of a Member State may refuse to provide
    information where the State concerned would be unable , for legal or prac­
    tical reasons , to effect ,a similar provision of information*   -
                                        .Article 9
                                   Cor Tritati ons
                                   IHM H.QiWl l,H .1
1,         Consultations on the application of the provisions of this directive
    shall be held , in a cormittee should the need arise , between :
    – the competent authorities of the two Member States , at the request of
      either , i;i respect of bilateral questions ;
    – the competent authorities of all the Member States and the Commission ,
      at the request of one of the authorities or of the Commission , in so far
      as the matters concerned are not solely of bilateral interest .
           In particular , consultations shall be held in the cases referred to
    in Article 3 , in Article 4 , paragraph 2 ai.d in Article 6.
 ---pagebreak--- 2.         The' competent authorities of the Ilember States shall have power to
  . communicate directly with each othor in the application of paragraph 1 ,
    The competent authorities of the Member States may lay mutual agreement per­
    mit authorities designated "by them to communicate directly with each other in
    specified cases or in specified groups of cases.
3.         Where the competent authorities make arrangements on bilateral matters ,
    other than the sottl sment of individual caces , which form the subject matter
    of this directive , they shall as soon as possible so inform the Comnd anion.
    The Commission shall notify the competent authorities of the other Member
■   States.
                                             Article 10
                                                    of Experi er.ee
           The Member States shall together with the Commission keep the collabo­
    ration prescribed by the provisions of this directive under constant review
                                      s                 <
    and shall pool their experience , especially in the field of transfer pricing
    within groups of companies with a view to securing improvements in collabo­
    ration and , where appropriate , formulating1 further measures in 'the specified
    fields .
             /
                                             Articl e 11
                                             ■ 1IMI llg>«IHllHI|i < ■
                   Effect upon wider obligations to provide assistance
                        a–*– ■ WMI n»a >i                 mmmmncmrmmia ■-& tmmmmwflwOWM––»
           The foregoing provisions shall be without prejudice to any wider obli­
    gations to exchange information assumed under any other international arran­
    gement having force of law.
                                             Article 12 .
                                          Final Provisions
*     \     The -. Member States !• shall bring into force the necessary legislative and
    administrative provisions in order to comply with the previsions of the present
    directive not later than the first day of January of the second year following
   the year of its adoption , and shall immediately communicate them to the Com­
   mission.                                                                      *
 ---pagebreak---                                       - 12 -
2.         The Member States shall ensure that the texts of any further main pro
   visions of national law that they adot>t ill the field covered by the present
   directive are communicated to the Commission ,
                                    Article 13
           The present directive is addressed to the Member States .
   Done at                    the                   In the name of the Council
                                                          The President