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EU Mandatory Disclosure Rules — An Update

EU Mandatory Disclosure Rules — An Update

New updates available for the UK, the Netherlands, Luxembourg and Denmark

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Members of the EU continue to take action to implement the EU Mandatory Disclosure rules by the end of the year. The UK, the Netherlands, Luxembourg and Denmark are the latest to either approve or publish draft legislation to implement these mandatory disclosure requirements within their domestic laws.

It is important to monitor how each EU Member State implements these rules since Member States may expand their disclosure rules beyond the EU's requirements. Multinational clients with operations in the EU will want to keep an eye on how different countries are administering and executing these rules to determine whether they have a reporting requirement or whether they have entered into transactions that must be reported by an intermediary.

EU member states have until the end of 2019 to pass domestic legislation that includes these requirements.

Background

Under the EU directive that includes the mandatory disclosure requirements (DAC 6), EU member states must introduce rules requiring intermediaries or taxpayers to disclose information on certain cross-border arrangements to tax authorities. These rules must apply starting July 1, 2020.

Intermediaries and relevant taxpayers must disclose reportable transactions (if the first step is implemented between June 25, 2018 and July 1, 2020) to relevant tax authorities by August 31, 2020. As of July 1, 2020, newly initiated arrangements will have to be disclosed within 30 days.

Recent updates

A recent status update on progress by the UK, the Netherlands, Luxembourg and Denmark regarding their adoption of the EU mandatory disclosure rules has been posted by KPMG's EU Tax Centre, which is monitoring these specific developments (see KPMG EU's TaxNewsFlash, "EU Mandatory Disclosure Requirements - Update"). The update considers how each country plans to address the scope of the reporting requirements, as well as various interpretive issues associated with their implementation.

In the consultation document released alongside draft legislation on July 22, 2019, the UK also states that Brexit is not expected to affect the implementation of these rules (or lead to their later repeal).

Implementation status in other states?

To date, Poland is the only EU Member State to have fully implemented the mandatory disclosure rules—the country's first deadline was June 30, 2019.

Seventeen countries have approved or published draft legislation for consultation or are discussing proposals within their Ministries of Finance (Austria, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Italy, Lithuania, Luxembourg, the Netherlands, Portugal, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).

The remaining ten Member States are expected to publish draft bills later in 2019, likely in the fall or after their local elections.

For more information, contact your KPMG adviser.

Information is current to August 13, 2019. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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