The Spanish Government has now a new procedure to apply the European directives about tax information exchange. This procedure obliges the Spanish Tax Authorities (also known as Public Tax Administration) to exchange information with the rest of the Member States concerning the payment of taxes on incomes, real estates, etc… This legal engagement is set forth in the Spanish Official Gazette dated on February 2006. So far, it was complicated to know whether a citizen from a European country had any properties, incomes, etc… in another member state or not; or even to know whether his taxes were correctly paid to the appropriate administration. That is the reason why the European Commission has made an effort during the last few years to create an interest and collaboration community between the different Tax Administrations from Member States.

An international collaboration that already exists and that is being currently applied in relation to this subject is the information exchange about interests paid to physical persons residing in another EU country. This is a measure applied in order to eliminate the tax haven status of many countries.
On the other hand, the information exchange subject is also mentioned in the treaties made to avoid international double taxation.

The opening of borders within the European Union has involved a huge challenge to the tax authorities from the different Member States, who over the years have suffered the notable lack of control regarding taxes. That entailed that it had become necessary to collaborate between countries in order to fight the tax fraud, money laundering, tax evasion, etc., etc.

This plan promotes the direct exchange of information. For that reason, the European Union has developed a software application to exchange international tax information.

This application allows the authorised persons (basically government officers) to exchange information about people, companies, properties and incomes that might be evading the tax payment and defrauding Public Tax Authorities.

A translation service (English, French and German) shall also be centrally created to manage the applications for external translation.

The legal framework for the information exchange about EU direct taxes is based on a Community Directive that was eventually incorporated to the Spanish law.

This cooperation agreement comes to culmination of an action programme carried out by the European Union; the aim of this programme was that officers cooperated to modernize, simplify and unify the Community legislation in order to achieve the administrative cooperation and coordination and to fight against the fraud. For that reason the Commission and the Member States have created communication exchange systems. All materials, software applications and networks have to be common for all Member States in order to guarantee the system compatibility. The European Commission shall organize common core training for officers, as well as tax training courses provided by each country to its officers. The necessary expenses for the development of this programme shall be distributed among the Member States.

Therefore, it might be affirmed that tax evasion is getting increasingly difficult in the European Union, as the international cooperation is closing more and more the fence to those who want to escape and avoid their tax duties.