The European Commission has launched a consultation Tackling the role of enablers involved in facilitating tax evasion and aggressive tax planning to inform the Commission’s proposals to prohibit enablers who design, market and/or assist in the creation of tax arrangements or schemes in non-EU countries that lead to tax evasion or aggressive tax planning in EU member states.
The Commission says that policy options ‘might include’:
a prohibition on enablers assisting in the creation of arrangements abroad that facilitate tax evasion or aggressive tax planning (with a requirement for all enablers to carry out dedicated due diligence procedures and keep records);
a requirement for enablers who provide advice or tax services to EU taxpayers or residents to register in an EU member state (with only registered enablers able to provide advice or services); and
a new mandatory code of conduct requiring enablers to ensure they do not facilitate tax evasion or aggressive planning.
One further option could include the requirement for EU taxpayers (individuals and companies) to declare annually in their tax returns any interest of more than 25% they hold in a non-listed company located outside the EU.
Although mentioned only briefly in the consultation document, the Commission proposes to address the vexed question of how to define aggressive tax planning, noting that it will set out ‘clear and objective criteria for defining the forms of aggressive tax planning that are prohibited’.
This latest consultation follows on from the Commission’s proposal for a Directive to ‘prevent the misuse of shell companies for tax purposes’.
The consultation runs until 12 October 2022, with the Commission’s ‘indicative timetable’ for adoption suggesting Q1 of 2023.
The European Commission has launched a consultation Tackling the role of enablers involved in facilitating tax evasion and aggressive tax planning to inform the Commission’s proposals to prohibit enablers who design, market and/or assist in the creation of tax arrangements or schemes in non-EU countries that lead to tax evasion or aggressive tax planning in EU member states.
The Commission says that policy options ‘might include’:
a prohibition on enablers assisting in the creation of arrangements abroad that facilitate tax evasion or aggressive tax planning (with a requirement for all enablers to carry out dedicated due diligence procedures and keep records);
a requirement for enablers who provide advice or tax services to EU taxpayers or residents to register in an EU member state (with only registered enablers able to provide advice or services); and
a new mandatory code of conduct requiring enablers to ensure they do not facilitate tax evasion or aggressive planning.
One further option could include the requirement for EU taxpayers (individuals and companies) to declare annually in their tax returns any interest of more than 25% they hold in a non-listed company located outside the EU.
Although mentioned only briefly in the consultation document, the Commission proposes to address the vexed question of how to define aggressive tax planning, noting that it will set out ‘clear and objective criteria for defining the forms of aggressive tax planning that are prohibited’.
This latest consultation follows on from the Commission’s proposal for a Directive to ‘prevent the misuse of shell companies for tax purposes’.
The consultation runs until 12 October 2022, with the Commission’s ‘indicative timetable’ for adoption suggesting Q1 of 2023.
