The End Of Financial Privacy. No Hiding Place.

2014 has seen further developments in the global move to automatic exchange of information for tax purposes. It will be introduced on a global scale, covering a wide range of income, within a couple of years.

The first half of 2014 saw further significant developments in the global move to automatic exchange of information for tax purposes. It will be introduced on a global scale, covering a wide range of income, within a couple of years.

In February, the Organisation for Economic Cooperation and Development (OECD), working with the G20, presented its new standard on exchange of information.

All OECD countries signed a declaration committing to automatic exchange of information between jurisdictions in May – a breakthrough moment since Switzerland was one of the signatories. This is clearly the end of banking secrecy for tax purposes.

Over 60 jurisdictions had signed up, with more expected to join this year. They will start collecting data from 31st December 2015, with the first reports of investors’ financial and tax details to be made by September 2017. Financial institutions will be required to collect and share client information covering all types of investment income, as well as account balances and sales proceeds. This includes accounts held by entities such as trusts.

Meanwhile, EU Member States formally adopted the revised Savings Tax Directive in March. From 2017, besides interest payments from cash deposits and debt claims, it will cover interest from investment funds, pensions, innovative financial instruments and payments through trusts and companies.

The EU’s Administrative Cooperation Directive also comes into effect next year. It applies automatic exchange of information to income from employment, director’s fees, life insurance, pensions and property. Dividends, capital gains and other financial income and account balances are expected to be added.

Spanish and international tax planning can be a minefield for the unwary. Your tax planning needs to be fully legitimate, up to date, and work well in the new environment. You need to consider whether your assets are in the most tax-efficient vehicles.

Please CONTACT US for specialist advice on approved and advantageous tax mitigation structures in Spain.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.