Council Number ( Official Text Not Yet Received , If Relevant)

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13308/13 COM(2013) 555 final

13310/13 COM(2013) 556 final

EXPLANATORY MEMORANDUM ON EUROPEAN UNION LEGISLATION

PROPOSAL FOR A COUNCIL DECISION ON THE CONCLUSION OF AN AGREEMENT BETWEEN THE EUROPEAN UNION AND THE FRENCH REPUBLIC CONCERNING THE APPLICATION TO THE COLLECTIVITY OF SAINT-BARTHÉLEMY OF UNION LEGISLATION ON THE TAXATION OF SAVINGS AND ADMINISTRATIVE COOPERATION IN THE FIELD OF TAXATION

PROPOSAL FOR A COUNCIL DECISION ON THE SIGNATURE, ON BEHALF OF THE EUROPEAN UNION, OF THE AGREEMENT BETWEEN THE EUROPEAN UNION AND THE FRENCH REPUBLIC CONCERNING THE APPLICATION TO THE COLLECTIVITY OF SAINT-BARTHÉLEMY OF UNION LEGISLATION ON THE TAXATION OF SAVINGS AND ADMINISTRATIVE COOPERATION IN THE FIELD OF TAXATION

September 2013 Submitted by H M Treasury

SUBJECT MATTER

1. On 1 January 2012 the territorial collectivity of Saint-Barthélemy ceased to be an outermost region of the Union and gained the status of overseas country or territory (Council Decision 2010/718/EU).

2. In order to ensure that Saint-Barthélemy continues to apply the provisions of EU legislation aimed at combating cross-border tax evasion, the Council approved a Commission proposal to negotiate an appropriate agreement with France on behalf of Saint-Barthélemy. This would apply the provisions of the Administrative Cooperation Directive (2011/16/EU) and the Savings Taxation Directive (2003/48/EC). This UNCLASSIFIED 1 UNCLASSIFIED

was to ensure that Saint-Barthélemy continues to apply measures equivalent to EU legislation in these areas in the future.

3. The Commission, on behalf of the EU and France, on behalf of Saint- Barthélemy have now concluded their negotiations and is presenting the Council with a final agreement for signature.

SCRUTINY HISTORY

4. Explanatory Memorandum 12306/11 on the negotiating mandate cleared scrutiny in the House of Commons on 7 September 2011 and in the House of Lords on 13 September 2011.

MINISTERIAL RESPONSIBILITY

5. The Chancellor of the Exchequer has responsibility for United Kingdom policy on European Union monetary and economic issues. The Foreign and Commonwealth Secretary is responsible for overall United Kingdom policy towards the European Union.

INTEREST OF THE DEVOLVED ADMINISTRATIONS

6. The UK’s tax policy is a reserved matter under the UK’s devolution settlements and no devolved administration interests arise. The devolved administrations have therefore not been consulted in the preparation of this EM.

LEGAL AND PROCEDURAL ISSUES

i. Legal basis

7. Articles 113 and 115 of the Treaty on the Functioning of the European Union, in conjunction with Article 218(5) and (8) second paragraph.

ii. Legislative procedure

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8. Council on a proposal by the negotiator (i.e. the Commission).

iii. Voting procedure

9. Unanimity.

iv. Impact on United Kingdom Law

10.None.

v. Application to Gibraltar

11.The proposals apply to Gibraltar.

vi. Analysis of Fundamental Rights Compliance

12.No fundamental rights issues arise under this recommendation.

APPLICATION TO THE EUROPEAN ECONOMIC AREA

13.The proposed agreement does not apply to Iceland, Liechtenstein or Norway.

SUBSIDIARITY

14.The proposal is to ensure that Saint Barthélemy continues to apply the provisions of EU Directives necessary to combat cross-border tax evasion now its status has changed to that of an overseas country or territory. It would be disproportionate for each Member State to negotiate separate tax cooperation agreements with France in respect of Saint Barthélemy. There is also a risk of a loss of tax revenue if the current EU legislation which used to cover Saint Barthélemy were to no

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longer apply. The proposed agreement therefore passes the subsidiarity test.

POLICY IMPLICATIONS

15.The Government supports the proposal, which ensures that St Barthélemy will continue to cooperate with Member States in the exchange of information and mutual assistance for tax purposes.

IMPACT ASSESSMENT

16.Not applicable

FINANCIAL IMPLICATIONS

17.There are no significant financial implications.

TIMETABLE

18.This document is likely to be considered by ECOFIN in the autumn.

David Gauke MP Exchequer Secretary Her Majesty’s Treasury

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