Automatic exchange of information to apply from 1 January 2016. Will this affect you?
The automatic exchange of information (official name: AEOI ) for tax purposes is an initiative by the OECD (Organisation for Economic Co-operation and Development) to impose restrictions against cross-border tax evasion.
The jurisdictions affiliated with the AEOI (the European Union, individual countries, etc.) have pledged that all financial institutions in their territory shall ascertain whether individuals and entities with an account with any of these institutions have tax residency status in a other countries belonging to the AEOI.
To clarify: if a financial institution in Belgium determines that an account holder is a Tax resident of another country, the institution must notify the Belgian tax authorities (Federal Public Service Finance) about these accounts. The tax authority shall, in turn, inform the tax office of the country in question.
- Mr A lives in the Netherlands, pays his taxes there and has a custody account at bank ABC in Belgium.
- Bank ABC is required to report the existence of Mr A's custody account to the Belgian tax office.
- The Belgian tax office forwards the information about Mr A's custody account with bank ABC in Belgium to the Dutch tax authorities (where Mr A is a resident).
- As is the case for all countries in the European Union (with the exception of Austria), Belgium will comply with the AEOI regulations as of 1 January 2016.
- Our bank will of course observe this legal obligation regarding the automatic exchange of information.
- We will initially apply these regulations for new customers wishing to open an account or existing customers who wish to open a custody account or take out a financial insurance policy (e.g. branch 21/23 insurance).
- Over the course of 2016, we will contact individuals who are already customers of ours and to whom the AEOI regulations apply.
More background information and additional details can be found in the summary (PDF) available via this link:
More information about AEOI and situations where it applies