Tax advisers, accountants, banks and lawyers who assist their clients to set up cross-border tax-avoiding schemes face strict new reporting requirements under a new directive from the European Commission.
Member states are required to transpose into domestic law new transparency rules for “intermediaries” who design and promote tax-planning schemes for their clients.
The commission says the directive is part of a package of future measures continuing to ramp up its tax transparency agenda and aims to tackle aggressive tax planning like that exposed by the “Panama Papers” by increasing scrutiny around the previously-unseen activities of such tax planners and advisers.
Schemes bearing certain characteristics or “hallmarks” which can result in losses for governments such as the use of losses to reduce tax liability, or of special beneficial tax regimes, or arrangements with states that do not meet international good governance standards will now have to be automatically reported to the tax authorities before they are used.
States will also share such information between them and it will be up them individually how they chose to punish failure to comply.
The commission says the requirement to report a scheme does not necessarily imply that it is harmful, only that it merits scrutiny by the tax authorities.
