According to Article 18 of the Savings Taxation Directive, the Commission is obliged to report to the Council on the operation of the Directive every three years. The report from the Commission presents an economic evaluation of the effects of the Savings Taxation Directive and proposes amendments to the Directive to ensure effective taxation of savings income and to remove any undesirable distortions of competition. In preparing the first report, the Commission has held an informal consultation with the tax administrations and with market operators of the Member States so as to examine the operation of the Directive and collect advice on possible amendments in terms of both legal and practical aspects. The Commission has now issued the first report on the operation of the Savings Taxation Directive. Dietmar Aigner takes a close look at the Commission’s conclusions and proposed amendments.