The Ministry of Finance warns about the upcoming duty of reporting of cross-border structures
June 25th, 2018 is when entered in force the Council Directive (EU) 2018/822 of 25 May 2018 („Directive”), which imposes the duty of informing about cross-border schemes including a feature pointing out a possible tax evasion threat.
EU Member States shall implement the Directive enforcing provisions by 31 December 2019. The implemented provisions are to become effective on July 1st, 2020.
What is more important, the Directive specifies that the reporting duty also applies to those structures which have been implemented since its entry in force – that is June 25th, 2018. According to the Directive, the duty shall also lie with individuals involved in development, implementation or disclosure of such schemes. The basic criterion of eligibility of a given cross-border structure shall be whether the main or one of the main advantages of its implementation is a tax benefit.
As a result of entry of the Directive in force, the Ministry of Finance notified that works on the implementation of its provisions are already being carried out. At the same time, the Ministry warns that the introduction of those provisions shall result in the duty of disclosing information about the structures in case of which the first implementation step was made after June 25th, 2018.
At the current stage it is difficult to say what the provisions under development shall finally look like. In particular it is still left to decide how the possible conflict between the duty to disclose schemes with the professional secret of advisors and entities upon whom that duty is imposed shall be addressed. It must be emphasized here that the current version of the Directive includes a very broad definition of such entities, allowing its applicability not only to tax advisors, lawyers or legal advisors, but also chartered accountants, notaries, accountants, investment advisors, banks and other financial institutions.