European Union: Proposal to require disclosure of tax avoidance schemes


Proposals have been published by Slovakia, the current holder of the EU presidency, that would require financial institutions and tax advisors to disclose details of offshore schemes.

The schemes falling within the scope of the proposal are those that have been designed with the intention of circumventing either anti-avoidance measures or the Common Reporting Standard for the automatic exchange of tax information. It is proposed that those who profit from the design or implementation of what the proposal describes as ‘tax evasion and avoidance schemes’ should be compelled to provide automatic disclosure of such schemes.

A similar proposal was published in July this year by the European Commission, which considered an obligation to disclose tax avoidance schemes should be imposed, together with a proposal that would allow tax authorities access to countries national anti-money laundering information, including information on beneficial ownership and due diligence.

It is the stated intention of the Commission to create disincentives that would deter the active promotion and enabling aggressive tax planning by tax advisors and others. The principal aim is to impose a disclosure obligation on advisors and those who ‘play a material role in the design, organisation, management or promotion’ of such schemes. The duty of disclosure would extend to the disclosure and identification of the users of such tax planning schemes. The schemes would be identified by certain ‘hallmarks’ of tax avoidance that they bear.

If you require advice and assistance with respect to your tax affairs to ensure that they are in good order please contact your local Rosemont office.