BEPS Action 12: Mandatory Disclosure in the EU

By Irma Mosquera Valderrama 

Yesterday, at the Dutch Association of Tax Advisers (NOB) Annual Congress, one of the topics that I addressed was the introduction of BEPS Action 12 dealing with mandatory disclosure in the EU.  This has been made possible by means of the amendment to the Administration Cooperation Directive that introduced automatic exchange of information in relation to reportable cross-border arrangements (Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements).

EU countries including the Netherlands need to have the legislation to implement the Directive  by 31/12/2019  and the automatic exchange will take place by 1/07/2020. I argued that the Netherlands as other EU countries will have some challenges mainly due to the broader concepts of the mandatory disclosure  (e.g. what to report, when to report, and also how to deal with professional privilege). Since the Directive will enter into force, I also proposed the creation of an European Supervisory Board for Taxation. The EU Commission is not a competent authority, therefore, the EU Commission has limited access to the information exchange. The European Supervisory Board should be created with representatives of tax administrations, and to gather every 3 months (similar to the JITSIC- Joint International Taskforce on Shared Information & Collaboration Network). See presentation Mandatory disclosure 21 june 2018.

The presentation was followed by a discussion with the audience (almost 750 tax advisers) and with the members of the panel. In my view, one of the conclusions is that right now is the moment to gather tax officials, judges, tax advisors, taxpayers so that the implementation of the Directive is the result of a dialogue between all affected parties. One of the comments made yesterday by a tax judge in the audience is the  judges should also be involved, since they will have a role on the interpretation of the legislation.

The NOB could take a leading role in promoting these discussions. This could be also a small step towards enhancing dialogue and global tax governance.