The DutchCham Tax committee organises again a round table discussion to address some of the recent developments.
At this upcoming peer-to-peer round table session we will discuss the EU Mandatory Disclosure Regime (MDR).
The EU has issued a directive that requires intermediaries (including EU-based tax consultants, banks and lawyers) and, in some situations, taxpayers to report certain cross-border arrangements (reportable arrangements) to the relevant tax authority in the EU. This disclosure regime applies to all taxes except value-added tax, customs duties, excise duties and compulsory social security contributions. Cross-border arrangements will be reportable if they contain certain features (hallmarks). The hallmarks cover a broad range of structures and transactions — for example, a reliance on safe harbours will require reporting regardless of the absence of tax planning. Some of the hallmarks will only trigger reporting requirements when they also fulfil the main benefit test (one of the main benefits expected from an arrangement is a tax advantage).
The primary reporting obligation lies with the intermediary. Where the intermediary is outside the EU or exempt from disclosing because of legal professional privilege, the obligation to disclose falls on another intermediary or, if none, the relevant taxpayers. Both for intermediaries and taxpayers implementation of the MDR can result in an increase in the EU compliance burden and in case of non-compliance this can result in significant penalties.
Enough food for discussion on August 20th!