Issue link: https://maltatoday.uberflip.com/i/748968
maltatoday, WEDNESDAY, 9 NOVEMBER 2016 11 Matthew Vella The European Council has agreed on a proposal granting access for tax authorities to information held by authorities responsible for the prevention of money laundering. The directive will require member states to enable access to information on the beneficial ownership of companies. It will apply as from 1 January 2018. The proposal is one of a number of measures set out by the Commission in July 2016, in the wake of the April 2016 Panama Papers revelations. The EU has made significant progress in recent years to enhance tax transparency and strengthen cooperation between the member states' tax authorities. And recent amendments to anti-money- laundering legislation recognise the links between money laundering and tax evasion, as well as the challenges faced in prevention. Media leaks such as the Panama Papers, revealing large-scale concealment of offshore funds, have highlighted areas where further measures still need to be taken. The transparency framework must be further reinforced at both EU and international levels. In particular, tax authorities need greater access to information on the beneficial ownership of intermediary entities and other relevant customer due diligence information. The directive will enable them to access that information in monitoring the proper application of rules on the automatic exchange of tax information. Where a financial account holder is an intermediary structure, financial institutions are required by directive 2014/107/EU to look through that entity and report its beneficial ownership. Applying that provision relies on information held by authorities responsible for the prevention of money laundering, pursuant to directive 2015/849/EU. Access to that information will ensure that tax authorities are better equipped to fulfil their monitoring obligations. It will thus help prevent tax evasion and tax fraud. Agreement was reached at a meeting of the Economic and Financial Affairs Council, without discussion. The Council will adopt the directive once the European Parliament has given its opinion. The directive requires unanimity within the Council, after consulting the Parliament. Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way Tax authorities to gain access to benefi cial ownership information Council backs prioritisation of expenditure in 2016 budget The European Council has ap- proved two Commission proposals to bring the 2016 EU budget in line with the EU's current priorities and actual needs. The draft amending budgets provide in particular for additional resources to tackle the migration crisis and enhance security. However, overall, they lead to a significant reduction in the payments level in this year's budget. This is because some programmes for the 2014-2020 period, in particular those in the area of economic, social and territorial cohesion, are not yet fully up and running and therefore draw on fewer payments than expected, in 2016. The two draft amending budgets still have to be approved by the European Parliament. Draft amending budget no 4 for 2016 reduces the payment level in this year's budget by €7.3 billion to €136.6 billion. This reflects the most recent needs' estimates, in particular in the area of economic, social and territorial cohesion. At the same time, it provides for additional financial assistance to tackle the migration crisis. This includes €50 million in commitments and €10 million in payments to help Greece and other member states to accommodate the humanitarian needs of refugees; €130 million in commitments for the asylum, migration and integration fund to help public services, NGO's and humanitarian organisations to provide accommodation for asylum seekers and language training for migrants; and €70 million in commitments for the internal security fund to help national authorities fight cross- border crime and terrorism and to ensure a high level of security in the EU. Draft amending budget no 4 is billed as a quicker mobilisation of €73.9 million in commitments for the European fund for strategic investments which seeks to overcome the current investment gap in the EU. The Council also approved the Commission proposal to compensate this year's revenue losses arising from the depreciation of the British pound with revenue from fines. In case the exchange rate losses exceed income from fines, the Commission will have to take appropriate measures, such as using the 2016 budget surplus. Exchange rate losses and gains are normal features of the existing budgetary arrangements. Draft amending budget no 5 for 2016 incorporates into the 2016 EU budget the impact of the retroactive application of the new own resources decision as from 1 January 2014. This follows the completion of the ratification process by all member states and the entry into force of the decision on 1 October 2016. This draft amending budget changes member states' individual share in the financing of the EU budget. The proposal to grant access for tax authorities to information held by authorities responsible for the pre- vention of money laundering comes in the wake of the Panama Papers revelations