The Directive which relates to direct taxation (income tax, company tax and capital gains tax), together with Insurance Premium Tax, enables Member States to
The Directive is based on a Commission proposal (COM(2003) 446 of 28/07/2003 ) and updates and rectifies weaknesses in the existing Directive on Mutual Assistance, 77/799/EEC. Modern technology and increased cross-border activity have made it more important than ever for information exchange and co-operation between tax administrations to be improved. A Council report on tax fraud of June 2000 (Council documents 8053/00 and 8668/00) noted that the existing EU directives and regulations were inadequate for the combat of fraud, which in the direct tax area involves, in particular, problems of under-invoicing and over-invoicing (transfer pricing).
This Directive complements other recently adopted EU legislation in the field of information exchange: the agreement on savings income and the Regulation on strengthening administrative co-operation in the VAT area.
For further information see press releases IP/04/539 and IP/03/1226.