The International Tax Enforcement (Disclosable Arrangements) Regulations, SI 2023/38, implement the OECD’s model mandatory disclosure rules for common reporting standard avoidance arrangements and opaque offshore structures in the UK. In essence, the OECD rules require taxpayers, promoters and advisers to disclose details of avoidance arrangements which use opaque offshore structures, or which circumvent the reporting of financial information under the common reporting standard, to the tax authorities.
The new UK legislation expands the information available to HMRC, to help HMRC identify and challenge offshore non-compliance and also provides a deterrent to those who might otherwise engage in ‘aggressive’ tax avoidance arrangements – for example, hiding money offshore or using artificial structures to hide assets. The regulations come into force on 28 March 2023.
The OECD model rules involve the sharing of information between the tax authorities of jurisdictions which have signed up to the OECD multilateral competent authority agreement (MCAA). The UK Regulations will be updated accordingly, as and when further countries sign up to the MCAA.
One important point to note is that the regulations revoke and replace the International Tax Enforcement (Disclosable Arrangements) Regulations, SI 2020/25, which implemented the EU equivalent DAC rules (Directive 2018/822/EU).
The International Tax Enforcement (Disclosable Arrangements) Regulations, SI 2023/38, implement the OECD’s model mandatory disclosure rules for common reporting standard avoidance arrangements and opaque offshore structures in the UK. In essence, the OECD rules require taxpayers, promoters and advisers to disclose details of avoidance arrangements which use opaque offshore structures, or which circumvent the reporting of financial information under the common reporting standard, to the tax authorities.
The new UK legislation expands the information available to HMRC, to help HMRC identify and challenge offshore non-compliance and also provides a deterrent to those who might otherwise engage in ‘aggressive’ tax avoidance arrangements – for example, hiding money offshore or using artificial structures to hide assets. The regulations come into force on 28 March 2023.
The OECD model rules involve the sharing of information between the tax authorities of jurisdictions which have signed up to the OECD multilateral competent authority agreement (MCAA). The UK Regulations will be updated accordingly, as and when further countries sign up to the MCAA.
One important point to note is that the regulations revoke and replace the International Tax Enforcement (Disclosable Arrangements) Regulations, SI 2020/25, which implemented the EU equivalent DAC rules (Directive 2018/822/EU).
