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EU Adopts Tax Transparency Rules For Intermediaries

by Ulrika Lomas, Tax-News.com, Brussels

04 June 2018


New rules on intermediaries that design or promote tax planning schemes have been adopted by the European Council.

At an ECOFIN meeting on May 25, the Council adopted the rules, aimed at preventing aggressive cross-border tax planning.

The new directive will require intermediaries such as tax advisors, accountants, and lawyers that design and/or promote tax planning schemes to report schemes that are considered potentially aggressive. EU member states will be required to automatically exchange the information they receive through a centralized database.

Penalties will be imposed on intermediaries that do not comply.

The directive establishes "hallmarks" to identify the types of schemes to be reported to the tax authorities. The requirement to report a scheme will not imply that it is harmful, only that it may be of interest to tax authorities for further scrutiny.

The Directive is intended to broadly reflect recommendations put forward by the OECD in Action 12 of its BEPS action plan.

Vladislav Goranov, the minister of finance of Bulgaria, which holds the Council presidency, said: "The new rules are a key part of our strategy to combat corporate tax avoidance. With greater transparency, risks will be detected at an earlier stage and measures taken to close down loopholes before revenue is lost."

EU member states will have until December 31, 2019, to transpose the Directive into national laws and regulations. The new reporting requirements will apply from July 1, 2020. Member states will be obligated to exchange information every three months, within one month from the end of the quarter in which the information was filed. The first exchanges should therefore be completed by October 31, 2020.

TAGS: compliance | tax | value added tax (VAT) | tax compliance | tax avoidance | law | tax planning | transfer pricing | regulation | European Union (EU) | Europe | BEPS

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