For a brief overview of the key points of the adopted text and its significance for the citizen, please see the corresponding summary note.

On 29 January 2020 the European Commission's new work programme was published. Under the third priority 'An economy that works for people', the Commission announced its intention to present an Action Plan to Fight Tax Evasion and make taxation simple and easy. It will complement the Communication on Business Taxation for the 21st Century.

On 27 May 2020, the European Commission, in its adjusted Commission work programme indicated the third quarter of 2020 as target delivery date of the Action Plan to fight tax evasion and to make taxation simple and easy, including tax good governance in the EU and beyond and revision of the Directive on automatic exchange of information.

In this regard, a legislative proposal to revise the directive on administrative cooperation, which will introduce an automatic exchange of information between Member States’ tax administrations for income/revenues generated by sellers on digital platforms and will strengthen administrative cooperation through the clarification of existing rules, was adopted by the Commission on 15 July 2020 as part of the tax package.

The Council reached agreement on adopting the Commission's proposal on amending the Directive on Administrative Cooperation (DAC7) on 1 December 2020. The EP Committee on Economic and Monetary Affairs published a draft report on 9 December 2020. It criticised some modifications introduced by the Council as the deletion of justified grounds for the rejection of a joint audit by competent authorities, the extension of several deadlines to respond, as well as the Council’s proposed delay for the directive’s application. In the draft report, it is suggested that:

• Member States should be generally free to use the information received not only for tax purposes;
• The exchange of information on cross-border rulings and advance pricing agreements should be strengthened;
• The Commission should publish annually anonymised summaries of the statistical data received by Member States.

The ECON committee tabled amendments on 11 January 2021 and adopted its report on the proposal on 4 February 2021.
The Parliament adopted, under a special legislative procedure (Parliament’s consultation), a resolution on the proposal for a Council directive amending Council Directive 2011/16/EU on administrative cooperation in the field of taxation on 10 March 2021.

Council Directive 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation was published in the Official Journal on 25 March 2021.

References

• EP Legislative Observatory, Administrative cooperation in the field of taxation, 2020/0148(CNS)
• European Commission, Commission Work Programme 2020 - A Union that strives for more, COM(2020)37
• European Commission, Adjusted Commission Work Programme 2020, COM(2020)440 final
• European Commission, Communication from the Commission to the European Parliament and the Council An Action Plan for fair and simple taxation supporting the recovery strategy, COM(2020)312 final
• European Commission, Proposal for a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation, COM/2020/314 final
• European Economic and Social Committee, Package for fair and simple taxation, ECO/531-EESC-2020
• European Parliament, Committee on Economic and Monetary Affairs Draft report on the proposal for a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation, (COM(2020)0314 – C9-0213/2020 – 2020/0148(CNS))
• European Parliament,  European Parliament legislative resolution of 10 March 2021 on the proposal for a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation (COM(2020)0314 – C9-0213/2020)
• Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation
  ST/12908/2020/INIT

Further reading:

• European Parliament, EPRS, Advances in administrative cooperation in the field of taxation, Briefing, February 2021

Author: Pieter Baert, Members' Research Service, legislative-train@europarl.europa.eu