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01/09/2017

Proposed Intermediaries Directive for tax planning intermediaries

On 21 June 2017, the European Commission proposed new transparency rules for intermediaries that design or sell potentially harmful tax schemes.

On 21 June 2017, the European Commission proposed new transparency rules for intermediaries that design or sell potentially harmful tax schemes. Cross-border tax planning schemes bearing certain characteristics or 'hallmarks' which can result in losses for governments will now have to be automatically reported to the tax authorities before they are used. The Commission has identified key hallmarks, including the use of losses to reduce tax liability, the use of special beneficial tax regimes, or arrangements through countries that do not meet international good governance standards. Under the proposal, intermediaries will have to report any cross-border arrangement that contains one or more characteristics (hallmarks) which might indicate that the arrangement is set up to avoid paying taxes. The proposal is submitted the European Economic and Social Committee for consultation and to the European Parliament and  the Council for adoption. If the proposed Directive is adopted, the new reporting requirements would enter into force on 1 January 2019, with the Member States obliged to exchange information every 3 months after that.