Since July 2005, the Savings Tax Directive ensures that paying agents either report interest income received by individuals resident in other EU Member States or levy a withholding tax on the interest income received. The European Commission has recently adopted an amending proposal to the Savings Tax Directive (2003/48/EC), which should close existing loopholes and eliminate tax evasion. This amendment is the result of the Commission report on the operation of the Savings Tax Directive. The report pointed out that the Directive is effective as long as it is applicable, but within the limits of its scope it can be easily circumvented. Therefore, the current scope of the Directive needs to be extended to improve the Directive, so as to better ensure the taxation of interest payments which are channelled through intermediate tax-exempted structures. It also proposes to extend the scope of the Directive to income equivalent to interest obtained through investments in some innovative financial products as well as in certain life insurances products. Moreover, simplification of the technical operation of the Directive should lead to a more user-friendly system and more efficient impleme...