Reporting liability on aggressive tax planning detected by tax advisors

26 September 2018


The European Council accepted the proposal about aggressive, cross-border tax planning on 13 March 2018. The main aim of the accepted proposal is to ensure greater transparency and to prevent corporate tax avoidance.

On the base of the proposal tax intermediaries (typically tax advisors, accountants, lawyers) are obliged to report those potentially aggressive transactions to the tax authority which they meet during their services.

This reporting does not mean that the reported transaction is seemed automatically aggressive, it just indicates that the tax authority should investigate the given transaction in details.

The proposal includes special hallmarks for the Member States on what constitutes the aggressive tax planning. On the base of this, for example, buying a loss-making company to exploit its losses in order to reduce tax liability, or converting income into capital in order to obtain a tax benefit can be classified as aggressive tax planning in the future.

The reported information will be recorded in a centralized database available for all the Member States.

The Member States have to adopt the proposal until 31 December 2019, but the new requirements will come into force on 1 July 2020. Tax intermediaries will have to report information quarterly which means that the first exchange of information will happen on 31 October 2020.

Marcell Andó |