The EU Member States have today endorsed the Commission’s proposals for a directive forcing intermediaries to disclose cross-border tax arrangements which are seen as tax aggressive. The proposals are intended to apply from July 2020 and will impose a significant additional burden on tax advisers and other intermediaries. The proposals were originally announced by the Commission in June 2017 and were designed to apply to any intermediary who devises or promotes an arrangement that bears one of certain specific hallmarks. The definition of intermediary casts a wide net, and includes, among others, consultants, lawyers (including in-house legal counsel), accountants, financial advisers, financial institutions, trust companies and insurance intermediaries. Such a person has to disclose details of the arrangement to its domestic tax authority; these are then automatically exchanged among the member states.
The proposals are modelled on the UK DOTAS regime, but in places go beyond that. They are part of the Commission’s proposals to combat tax avoidance and promote tax transparency. While generally this has been welcomed, there are various issues coming out of the proposals: