European War on Tax Evasion: new development

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USA and ESA new European system for the automatic exchange of tax related information will be launched on January 1, 2015. The system will address tax evasion in the EU and also help developing countries collect more tax. Tax evasion is concealing taxable income or assets in anther jurisdiction other than the jurisdiction of residence. On the opposite side, tax avoidance is a legal way to reduce a tax burden via loopholes in tax legislation. The USA and EU are a driving force on the war on tax evasion. Tax evasion is going be one a main topic at the coming G8 summit in Northern Ireland. In particular, the new European automatic exchange system will capture a wide range of information on various type of income including dividend income, capital gain, director income and other. The system will include the collecting and exchange of tax related information on residents and non-residents. The European commission is considering the new system as a fundamental change for controlling tax evasion worldwide.