European Commission proposes mandatory disclosure for intermediaries
Intermediaries must notify the Tax Administration about potentially aggressive tax planning schemes. The Tax Administration will then automatically exchange this information with tax authorities in other Member States.
22 June 2017
Proposal for a Directive
The European Commission (EC) published a proposal for a Directive on June 21, 2017, calling for the automatic exchange of information about aggressive tax planning schemes with cross-border elements. The EC prefers to have (i) the Member States lay down an explicit obligation for the implementation of a mandatory disclosure of all potentially aggressive tax planning schemes with a cross-border element, and (ii) the Member States ensure automatic exchange of data between the tax authorities.
The EC argues that reporting under a mandatory disclosure regime will increase the pressure on intermediaries, such as tax lawyers, to refrain from designing, marketing and implementing aggressive tax planning schemes. Likewise, taxpayers would be less inclined to set up such schemes if the related data is exchanged automatically.
The Directive will oblige intermediaries to inform the Tax Administration about potentially aggressive tax planning if they are involved in such schemes - either professionally, because they have designed them, or because they promote them. An intermediary can be a legal entity, individual or an entity without legal personality. If no intermediary can be identified or a privilege applies to the intermediary, the obligation to provide information is shifted to the taxpayer.
Specifying all forms of potentially aggressive tax planning is impossible - partly in light of the static character of the Directive -, so the EC has opted for providing a list of hallmarks that present a strong indication of aggressive tax planning. These hallmarks are formulated in general terms and they have been recorded in an appendix.
Intermediaries must provide the Tax Administration with information about a scheme within a five day period as from the day the scheme becomes available to a taxpayer for implementation. A standard form will be created for this purpose. Every quarter, the Tax Administration must automatically exchange the information with other EU authorities. This will be done by uploading the information in a central directory to which all tax authorities will have access. If the Directive is adopted, then the first batch of data must be provided on March 31, 2019 at the latest. This batch will then also include data over the period between reaching a political agreement on this Directive and December 31, 2018.
Source: Proposal for a Directive providing for mandatory disclosure, of June 21, 2017 (COM(2017)335 final)