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Jul 6, 20172 min read

Hard rules prepared for tax consultants, accountants, banks and lawyers will also be affected by mul

Moreover, there will be a database through which tax authorities within the Member States of the European Union will exchange this information every three months. Thus, the information will warn them in advance of the new risks of circumvention of tax obligations. In this respect, all categories of direct taxes, including income, profit, capital gains and inheritance, are covered. The fiscal planning systems that will have to be reported have been identified by the European Commission as having the following characteristics:

  1. involves a cross-border payment to a non-tax country resident;

  2. involves a tax jurisdiction with anti-money laundering legislation that is inadequate or too weak;

  3. the arrangement is designed to avoid revenue reporting in line with EU transparency requirements;

  4. circumvents the requirements for the exchange of information on “rulling” tax systems;

  5. there is a direct link between the cost of the service provided by the intermediary and what the taxpayer will save by avoiding the payment of taxes;

  6. the same income would benefit from tax exemptions in several jurisdictions

  7. does not comply with EU or international transfer pricing rules.

The obligation to report cross-border systems that show one or more of these characteristics will be incumbent on:

  1. the intermediary who put the cross-border system at the disposal of a company or a natural person for implementation and use;

  2. the person or company receiving the advice when the intermediary providing the cross-border system is not established in the EU or if the intermediary is subject to rules of professional secrecy or confidentiality;

  3. the person or company implementing the cross-border system, when it is developed by internal lawyers or tax consultants.

Thus, it is important to mention that if the consultant, lawyer or bank is not part of a state member of the European Union, the above rule will have to be respected by the company or beneficiary. This proposal will be submitted to the European Parliament for consultation and the Council for adoption. The measure should ensure a stricter control of various tax planning entities and advisers activities. Countries will also be required to implement effective sanctions for companies that do not comply with transparency measures.

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