Exchange of information with the tax authorities

From 2020, tax advisors and other intermediaries who advise on tax issues will be required to exchange information with the tax authorities about certain types of advice. As stated in the European Mandatory Disclosure Rules (MDR), this mandatory exchange of information applies to cross-border transactions that meet certain characteristics (hallmarks). These characteristics provide an indication enabling certain undesirable tax planning methods to be revealed.

Transparency and anti-abuse measures

These MDR laws build on EU transparency rules and anti-abuse measures, with the aim of preventing tax evasion. The EU’s aim is to enable member states to adjust their legislation, if necessary, with a view to preventing unwanted tax planning.

What does this mean for you?

If you are advised on cross-border transactions with one of the listed characteristics (or hallmarks), your advisor may need to exchange information about this transaction with the tax authorities.

Examples are transactions where a payment is made to a company in another jurisdiction where:

• According to tax law, the recipient of the payments is not established in any jurisdiction; or
• the recipient of the payment is established in a country where very little or no profit tax is levied; or
• the payment in the country of the recipient is exempt from profit tax; or
• the payment in the country of the recipient is subject to a particularly advantageous tax.

Your accon■avm adviser will inform you if information is exchanged with the tax authorities on the basis of MDR. If you have any questions, please send an email to international@acconavm.nl.