The European Commission published new transparency rules for tax planning intermediaries such as tax advisors, accountants, banks and lawyers, who design and promote tax planning schemes for their clients.

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 if the Commission’s proposal is successful. Under the proposals, member states will automatically exchange information on tax planning schemes through a centralised database and member states can take measures to block harmful arrangements.

The proposal, which takes the form of an amendment to the Directive for Administration Cooperation (DAC), will be submitted to the European Parliament for consultation and to the Council for adoption. According to the Commission, the new reporting requirements should enter into force on 1 January 2019, with EU Member States obliged to exchange information every 3 months after that.

Earlier this year Chartered Accountants Ireland under the auspices of the CCAB-I responded to a consultation carried out by the Commission on this topic. The CCAB-I’s submission noted that mandatory disclosure obligations are already in place at a national level in Ireland and Ireland also has international information exchange arrangements in place that are prescribed by the OECD. The CCAB-I contends that the European Commission will be duplicating laws already in place and will also be interfering with national sovereignty in direct tax matters if it tries to impose additional laws at EU level.