The Council of the European Union has formally confirmed the entry into force of an Amending Protocol to the EU-San Marino agreement on the automatic exchange of financial account information, a move aimed at improving international tax compliance and combating tax evasion. The protocol updates the existing bilateral framework to align with global standards on tax transparency, affecting financial institutions and tax authorities in both jurisdictions.
Document Details and Legal Status
The document, a Council note dated 1 June 2026, records the entry into force of the protocol, which was concluded under the EU's taxation policy area. The protocol amends the 2015 EU-San Marino agreement on automatic exchange of financial account information, bringing it in line with the OECD's Common Reporting Standard updates. As a binding international agreement, it imposes mandatory obligations on EU member states and San Marino to automatically exchange financial data of account holders.
Policy Orientations and Trade-offs
The protocol strengthens tax transparency by expanding the scope of reportable accounts and improving data quality. This reflects a trade-off between privacy and fiscal compliance: while it enhances authorities' ability to detect tax evasion, it increases administrative burdens on financial institutions required to collect and report additional data. The measure also balances sovereignty concerns, as San Marino commits to EU-level standards while retaining control over its domestic tax system.
Impact on Stakeholders - EU tax authorities: Gain access to more comprehensive financial data from San Marino, improving their ability to identify and pursue tax evaders. - Financial institutions in the EU and San Marino: Face higher compliance costs due to expanded reporting requirements, including updating IT systems and training staff. - Account holders with assets in San Marino: Experience reduced financial privacy as their account information is automatically shared with their country of residence. - San Marino's government: Benefits from improved international reputation and access to reciprocal data from EU states, but must enforce the new rules domestically.
Institutional Follow-up
The protocol's entry into force completes the ratification process. The European Commission will monitor implementation and may propose further updates to maintain alignment with evolving global tax transparency standards. No further Council action is required at this stage.
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