BackThe Court of Justice of the European Union (CJEU) has confirmed that tax advisors, other than lawyers, have an obligation to report potentially abusive practices by their clients to the tax authorities. This decision follows an appeal brought by the Belgian Association of Tax Lawyers in relation to the controversial DAC 6 Directive, which obliges tax advisors to notify cross-border tax arrangements that could lead to tax avoidance or evasion.
The CJEU had previously exempted lawyers from this obligation due to the protection of their professional secrecy, but now stresses that other professionals, such as managers and economists, will still have to report such information. The judges point out that the protection of lawyers’ professional secrecy is essential to safeguard confidence in the lawyer-client relationship in a democratic society.
The reporting obligation covers the identification of the persons involved, as well as details of the tax mechanism in question. This regulation aims to combat aggressive tax planning, allowing states to react swiftly to possible abuses.
Since May 2021, Spanish law requires reporting of ‘cross-border arrangements’ involving parties from at least two EU countries or between an EU country and a third country, whenever there are indications of aggressive tax planning. Although these practices are considered ‘aggressive tax planning mechanisms’, the law clarifies that the obligation to report does not necessarily imply that they are fraudulent.
B Law & Tax International Tax & Legal Advisors.
“At B LAW&TAX we are specialists in international tax advice for both companies and individuals. If you would like further information, we will be pleased to assist you at 917817194 or info@blaw.es”
