PAN-EUROPEAN PENSIONS SPECIAL – The issue of today’s communication on cross-border tax harmonisation for occupational pension plans by the European Commission harks back to a directive issued nearly 30 years ago on exchange of information by member states.

The communication, which proposes that member states eliminate tax discrimination against occupational plans set up in other member states, would, the Commission says, work along the same lines as 1977’s Mutual Assistance Directive; an exchange of information framework between member states for tax on savings.

Under the Commission’s proposals information on benefits paid by pension institutions to residents of another member state would automatically be exchanged to the new host state to allow it to verify compliance by residents with its own tax regulations.
The Commission says the existing committee for automatic information exchange under the 1977 directive will look into the details of what needs to be provided for such a system to work.

Minimum information expected, however, would include personal details, details of the pension institution or pension provider, policy number, date of pension entitlement and total annual payments by employer and employee, and by the provider and their nature (periodic or lump sum).

The Commission adds that it may be that the information will be exchanged by member states having been collected from institutions, or directly from institutions to member states.

At a later stage the Commission says it may also consider information exchanges for third pillar pension plans, including life insurance arrangements.

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