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Commissioner Advocates Stronger GDPR Safeguards In Tax Reform

by THEFUTURE.TEAM

November 26, 2025

Commissioner Maria Christofidou, the authoritative figure in personal data protection, has recently reiterated her support for the government’s ambitious tax reform measures. On both November 14 and November 21, she underscored the need for a balanced approach that safeguards citizens’ privacy while reinforcing the fiscal system.

Addressing Previous Concerns

Earlier, the Commissioner expressed worries about the excessive centralization of power within the Tax Department, a concern detailed in a recent analysis. Her latest recommendations echo these early concerns by emphasizing that any adoption of advanced artificial intelligence systems by the tax authority must be accompanied by robust data protection measures.

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Integrating Safety Valves With Artificial Intelligence

The Commissioner is calling for the integration of explicit safety mechanisms within the legislative framework governing tax reform. This provision is critical to ensure that the collection, analysis, and processing of mass data—spanning both public and private sources—remain strictly aligned with the overarching principles of the General Data Protection Regulation (Gdpr). The proposed measures would mitigate risks of bias, discrimination, and potential infringements on individual privacy that could arise from algorithm-driven decision-making.

A Call For Transparent And Effective Governance

In her communication with the Parliamentary Committee on Finance, Christofidou welcomed the government’s initiatives aimed at curbing tax evasion and avoidance. However, she stressed that any legal framework established must be robust, transparent, and capable of balancing effective tax collection with stringent data protection standards. Central to this balance is the necessity for comprehensive data governance and mandatory impact assessments under Articles 35 and 36 of the Gdpr.

Legislative Timetable And Future Implications

The Commissioner further argued that the forthcoming tax reform legislation, particularly the Guarantee and Collection Act, should include a general provision that refers explicitly to the Gdpr. This measure is intended to ensure that all data collection and processing activities conducted by the tax authority are performed within an established regulatory framework that upholds legality, integrity, objectivity, transparency, and proportionality.

Additionally, she recommended that, should the Tax Department employ artificial intelligence systems in its operations, an in-depth data protection impact assessment must be completed. This proactive approach would provide a crucial safeguard both for the tax authority and any entity that contributes data, thereby bolstering confidence in the public administration’s handling of sensitive information.

Imminent Parliamentary Review

Simultaneously, deliberations continue in the Parliamentary Committee on Finance, where six draft bills are under discussion. Owing to time constraints, an emergency session has been scheduled for Thursday. In response to government directives, the legislature is expected to approve the tax reform initiative before year-end to facilitate its implementation by January 1, 2026. It is anticipated that the draft bills will be presented before the full Parliament during the first half of December.

The Commissioner’s remarks underscore the critical intersection of technological innovation and regulatory oversight in contemporary tax administration—a balance that will define the future of both fiscal policy and data privacy.

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ECB Launches Geopolitical Stress Tests For 110 Eurozone Banks

The European Central Bank is preparing a new round of geopolitical stress tests aimed at assessing potential risks to major financial institutions across the euro area. Up to 110 systemic banks, including institutions in Greece and the Bank of Cyprus, will take part in the exercise, which examines how geopolitical events could affect financial stability.

Timeline And Testing Process

Banks are expected to submit initial data on March 16, 2026. Supervisors will review the information in April, while the final results are scheduled to be published in July 2026. The process forms part of the ECB’s broader supervisory work to evaluate financial system resilience under different risk scenarios.

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Geopolitical Shock As The Primary Concern

The stress tests place particular emphasis on geopolitical risks. These may include armed conflicts, economic sanctions, cyberattacks and energy supply disruptions. Such events can affect banks through changes in market conditions, borrower solvency and sector exposure. Lending portfolios linked to regions or industries affected by geopolitical developments may face higher risk levels.

Reverse Stress Testing: A Tailored Approach

Unlike traditional stress tests that apply the same scenario to all institutions, the reverse stress test requires each bank to define a scenario that could significantly affect its capital position. Banks must identify a geopolitical shock that could reduce their Common Equity Tier 1 (CET1) ratio by at least 300 basis points. Institutions are also expected to assess potential effects on liquidity, funding conditions and broader economic indicators such as GDP and unemployment.

Customized Risk Assessments And Supervisor Collaboration

This methodology allows banks to submit risk assessments based on their own exposures and operational structures. The approach is intended to help supervisors understand how geopolitical events could affect institutions differently and to support discussions between banks and regulators on risk management and contingency planning.

Differentiated Vulnerabilities Across Countries

A joint report by the ECB and the European Systemic Risk Board indicates that countries respond differently to geopolitical shocks. The Russian invasion of Ukraine led to higher energy prices and inflation across Europe, prompting central banks to raise interest rates. Belgium, Italy, the Netherlands, Greece and Austria experienced increases in borrowing costs and lower investor confidence. Germany, France and Portugal recorded more moderate changes, while Spain, Malta, Latvia and Finland showed intermediate levels of exposure.

Conclusion

The geopolitical stress tests will not immediately lead to additional capital requirements for banks. Their results will feed into the Supervisory Review and Evaluation Process (SREP). ECB supervisors may use the findings when assessing capital adequacy, risk management practices and operational resilience at individual institutions.