New transparency rules for intermediaries—such as tax advisers, accountants, banks and lawyers, who design and promote tax-planning schemes for their clients—have been agreed by EU member states.
Designed to tackle tax avoidance and boost tax transparency already agreed at EU level, the new rules will require tax intermediaries, who provide clients with complex cross-border financial schemes that could help dodge tax, to report these structures to their tax authorities.
Member states will then exchange this information with each other, further increasing scrutiny around the activities of tax planners and advisers.
The requirement to report a scheme does not necessarily imply that it is harmful, only that it merits scrutiny by the tax authorities. Companies that do not comply with the transparency measures, however, will face penalties.
The agreement was reached by EU Economic and Financial Affairs ministers at their meeting in Brussels this week, following a proposal by the European Commission in June 2017.
Following the agreement, Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, said the new rules confirm the EU as the world-leader in tax transparency.
He added: “In future, intermediaries will have to share with tax administrations the schemes they sell to their clients. Tax administrations will then have access to the information they need to put an end to the aggressive tax-planning schemes eroding their tax bases.
“This agreement is a further step towards more openness and better cooperation, facilitating fairer and more effective taxation throughout the EU.”
The new reporting requirements will come into force on 1 July 2020, with member states obliged to exchange information every three months after that. The first exchange will take place by 31 October 2020.