The European Commission, on 21 June 2017, published a draft Directive that would impose mandatory reporting by taxpayers and intermediaries to the tax administrations of EU Member States for various cross-border transactions and arrangements, and the automatic exchange of this information among Member States (see previous coverage).
Taxpayers and intermediaries (such as consultants, banks, and lawyers) will have to report any cross-border arrangement that contains one or more of the “hallmarks” listed in the proposal. These hallmarks are features in a transaction that could potentially enable tax avoidance or abuse. Examples are 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 current proposal, the first reports to tax administrations would apply from 1 January 2019. However, the proposal also includes a degree of retrospective reporting for arrangements implemented between the actual date of political agreement and 31 December 2018.
This bulletin addresses the package as a whole, the cross-border arrangements and hallmarks that trigger a disclosure, the person that needs to disclose and the consequences for business, what information must be disclosed/exchanged and when, the potential penalties, and the EU law issues to consider.
Read the full bulletin here.
Please contact your local PwC contact or Evi Geerts, Pieter Deré or Maarten Temmerman for any questions.
- Accounting and Tax Compliance
- Base erosion and profit shifting (BEPS)
- Corporate income tax
- International taxation