Wednesday 16 August 2017

Tax advisers face fines under EU 'avoidance' clampdown

Tax advisers will have to disclose cross-border tax schemes deemed to be too
Tax advisers will have to disclose cross-border tax schemes deemed to be too "aggressive" to tax authorities in the countries where they operate

Francesco Guarasci

Tax advisers will be penalised for helping companies set up schemes that cut tax bills excessively by shifting profits to low-tax countries, under draft EU law seen by Reuters.

The measure, prepared by the European Commission, and still subject to changes, would force accounting firms such as PwC, KPMG, Ernst & Young and Deloitte, banks and other tax advisers to inform authorities about "potentially aggressive tax planning arrangements" set up for their clients.

Tax avoidance is not illegal, but the measures are being considered by the European Union after last year's Panama Papers and other revelations of widespread tax avoidance by wealthy individuals and big firms.

The proposal, expected to be published in June, dictates "effective, proportionate and dissuasive penalties" for non-compliance, but leaves states free to decide sanctions or fines.

Tax advisers will have to disclose cross-border tax schemes deemed to be too "aggressive" to tax authorities in the countries where they operate. The information should then be "automatically" shared among EU countries' administrations.

This requirement for an early warning is intended to discourage the transfer of corporate profits taxable in one EU state to other jurisdictions where they would be taxed at much lower rates.

If there is no intermediary, or the tax adviser is located outside the EU, the obligation of disclosure would fall on the taxpayer using the arrangement.

The draft law does not define "aggressive tax planning", because any definition would risk being The Commission proposal will need the approval of the European Parliament and all EU states to become law. (Reuters)

Irish Independent

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