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13 March 2018 / article

New EU Mandatory Disclosure Rules for intermediaries

On 13 March 2018, the Council of the European Union reached political agreement on a Council Directive (“Directive”) introducing mandatory disclosure rules for intermediaries such as lawyers, accountants and tax advisers.

new eu mandatory disclosure rules for intermediaries

Intermediaries must report potentially aggressive tax planning arrangements with a cross-border dimension as well as arrangements designed to circumvent reporting requirements like CRS and UBO reporting. EU Member States’ tax authorities will exchange the information automatically within the EU through a centralized database.

The reporting obligation applies to intermediaries with residency, incorporation, professional registration or a permanent establishment in an EU Member State and only related to cross-border arrangements concerning at least one EU Member State. The Directive does not include a definition of aggressive tax planning. Instead it includes a list of features, elements and examples of arrangements that should present a strong indication of aggressive tax planning or the undermining of reporting obligations. Covered intermediaries must disclose such arrangements within 30 days after making them available to their clients.

In certain cases, for instance when no intermediary is involved, when the intermediary does not have an EU presence or in the case of client-attorney privilege, the obligation to report lies with the client.

Member States must implement the Directive in their domestic laws ultimately on 31 December 2019 and apply it as from 1 July 2020. However, it will have retroactive effect for all reportable arrangements the first step of which was implemented in the time frame between the entry into force of the Directive (likely June/July 2018 after formal approval by the Council) and 1 July 2020. This means that starting summer 2018, intermediaries and their clients should already monitor all tax advice provided with a cross-border dimension and all advice concerning reporting requirements to ensure that a future obligation to report can be properly fulfilled.

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We will keep you informed on future developments. Should you have any question, please contact your trusted Loyens & Loeff adviser.



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