New EC consultation on aggressive tax planning

A new consultation has been launched by the European Commission to gather feedback on the need for new rules to deter promoters of aggressive tax planning schemes. The Commission is concerned with recent reports that have highlighted the way certain intermediaries, such as tax advisers, have helped their clients to shift profits offshore for the purposes of tax avoidance or evasion.

The Commission has been clear that they are not looking to limit certain complex transactions and the setting up of off-shore companies may be entirely justifiable. However, the new rules would oblige intermediaries to give early information on schemes which could be viewed as aggressive or abusive planning for tax purposes. This would help enhance transparency and offer a more effective disincentive to those looking to put in place aggressive tax planning schemes. The consultation will investigate how a mandatory disclosure scheme for tax advisers could be put in place.

The consultation wants to gather views in particular on the following:

  • Need for EU action.
  • The different options identified, in case EU action is appropriate.
  • The key design features of a possible disclosure regime.

Commenting on the launch of the consultation, Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs Union said:

'Complex financial schemes and opaque corporate structures do not happen by accident: some intermediaries have developed these into an art-form. These experts offer their clients the opportunity to aggressively exploit loopholes or to shift their profits so as to substantially reduce their tax bill. The public consultation we're launching today will help us to work out ways to deter intermediaries from designing such schemes and to give our Member States greater insight and information to enable them to put a stop to them.'

The deadline for responses to the consultation is 16 February 2017.

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