25 May

(EU) Corporate tax avoidance: Transparency rules adopted for tax intermediaries

Today, 25 May 2018, the European Council adopted rules aimed at boosting transparency to prevent aggressive cross-border tax planning.

The directive targets intermediaries such as tax advisors, accountants and lawyers that design and/or promote tax planning schemes. It will require them to report schemes that are potentially aggressive.

The information received will be automatically exchanged through a centralised database. Penalties will be imposed on intermediaries that do not comply.

Combat corporate tax avoidance

The new rules are a key part of our strategy to combat corporate tax avoidance”, has said Vladislav Goranov, minister for finance of Bulgaria, which currently holds the Council presidency. “With greater transparency, risks will be detected at an earlier stage and measures taken to close down loopholes before revenue is lost.

The directive was adopted at a meeting of the Economic and Financial Affairs Council, without discussion. Member States will have until 31 December 2018 to transpose it into national laws and regulations.

Next steps

The new reporting requirements will apply from 1 July 2020. Member states will be obliged to exchange information every three months, within one month from the end of the quarter in which the information was filed. The first automatic exchange of information will thus be completed by 31 October 2020.

The directive requires unanimity within the Council, after consulting the European Parliament. The Parliament voted its opinion on 1 March 2018. (Legal basis: articles 113 and 115 of the Treaty on the Functioning of the European Union.)

Click here for further information (March 2018 draft directive on tax intermediaries). And remember that if you are thinking about set up a company in Spain, or if you have workers in Spain, don´t hesitate to contact our team of experts.

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