Finance ministers of European countries have reached an agreement to extend the scope of automatic exchange of information between tax administrations to include more types of income to the end of bank secrecy in tax matters.
The news comes after Luxembourg and Austria, who had been holding out against the deal, backed down.
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The announcement follows the OECD publication of a new common reporting standard in July, which was subsequently adopted by the G20.
EU countries would be expected to include the new rules in national laws by 2017 in order to comply with the OECD’s timetable.
However, Austria will have until 2018 to comply, in order to give the country additional time to create a new reporting system, according to the Financial Times.
Under the law, all EU countries would be required to automatically send data back to tax authorities in a European depositor’s home country.
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By GlobalDataThe agreement extends an existing law on bank-data exchange law to cover additional forms of income and information, including dividends, interest and account balances. Member states already share information on income from employment, directors’ fees, life insurance, pensions and property.
"This [measure] promises full and lasting tax transparency in Europe," said Algirdas Semeta, the outgoing EU tax commissioner.
The European Commission estimates that tax evasion and fraud costs member states about 1trillion ($1.26 trillion).
