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Mandatory disclosure requirements on certain types of tax transactions undertaken by taxpayers will apply in the EU from 1 July 2020. Any reportable tax arrangements enacted since 25 June 2018 must be reported retroactively by the taxable entities or their intermediaries. Taxpayers with operations in any of the EU states will need to understand the impact of these rules, assess their activities and determine what to report, and to whom. KPMG has developed an approach to assisting clients with their processes and controls and a technology solution to help accumulate and assess potentially reportable transactions.

The reporting obligation presents a number of challenges:

  • No uniform rules across the EU
  • Difficulty in obtaining data
  • Unclear demarcations of responsibility
  • Resource allocation
  • Understanding who is reporting what

Webcast: EU Mandatory Disclosure Regime - Is your Financial Services business prepared?

The Mandatory Disclosure Requirements (MDR) or DAC 6 directive for intermediaries and relevant taxpayers will apply from 1 July 2020, with retroactive effect. Most Member States have now transposed the new reporting rules into domestic law but are yet to publish detailed implementation guidelines, meaning there continues to be a high degree of uncertainty around the application of MDR in practice.

 

With particular relevance for financial services businesses, local implementations of the rules continues to be actively monitored by potentially impacted groups as they seek to understand the practical impacts in the way they operate globally. Based on what is known so far on domestic implementation, it is apparent that there is divergence across jurisdictions, including on crucial terms such as the “main benefit test” and “intermediary”, as well as many of the "hallmarks". With no one common approach many financial services organisations with an extensive European footprint are likely to face challenges in implementing a robust process across the organisation.

This webcast explored the evolving impact of MDR across the financial services sector. Our panel shared their insights on the latest developments of this far reaching legislation, highlighted key themes and potential areas of difficulty and also discussed current industry best practices. With a particular focus on how the rules may apply to banks, insurers, asset managers, and other financial services businesses. We also took a closer look at the differences between a number of key locations and the best in class steps that multinational institutions are taking to address the practical issues arising.

Watch the replay here

View the presentation here.

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If you are considering optimising your tax compliance management processes by using technology and would first like an overview of the functionality and suitability of KPMG’s DAC6 Processor, contact us here.