Category Archives: Tax Evasion

New podcast episode of MDR Unpacked: Episode 3 – Argentina

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In our latest episode of MDR Unpacked, our Director of Best Practice Gary Yantin and Head of Legal and Product Research Ruth Mittelmann Cohen share the latest updates on the Mandatory Disclosure Rules in Argentina. They will look at what MDR means in Argentina, the timescales, the penalties and who needs to comply.

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DAC6: Spanish reporting system still not available

Tax advisers are still unable to report DAC6 arrangements in Spain due to the lack of a reporting system. The EU’s DAC6 Directive requires reporting of historical arrangements by the end of February, but the Spanish Tax Agency (Agencia Tributaria) has not yet enabled a mechanism to make a report.

The Spanish Association of Tax Advisors (Aedaf) announced at the end of January that it will be impossible for them to comply with their DAC6 obligation as the Ministry of Finance has not yet approved the regulations to do so. Furthermore, the Spanish Government has not yet responded to the clarifications requested by tax advisers providing them with guidance on which arrangements to report. 

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DAC6 Country Profile: UK

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UK Parliament and British flag
In light of the COVID-19 pandemic, the UK decided to defer DAC6 reporting by six months

We are publishing a series of guides on how each EU member state has implemented DAC6. The guide provides a preview to our full up-to-date country-by-country guide to DAC6.

Our next guide focusses on the UK’s implementation of DAC6.

This blog was originally published in July 2020 and was updated in February 2021.

How has the UK implemented DAC6?

Legislation Details

HMRC published the UK DAC6 legislation on 29 December 2020. The legislation is called “The International Tax Enforcement (Disclosable Arrangements) (Amendment) (No. 2) (EU Exit) Regulations 2020”. Here is the UK’s guidance on DAC6.

Taxes covered

UK legislation covers cross-border arrangements. The legislation is in line with the EU Directive, (i.e., direct taxes are in scope while indirect
taxes, customs duties or excise duties and compulsory social security
contributions are not covered), and does not include domestic arrangements or any additional hallmarks.

NOTE: The scope of DAC 6 has been amended following Brexit through the International Tax Enforcement (Disclosable Arrangements) (Amendment) (No. 2) (EU Exit) Regulations 2020 (2020 No. 1649). The UK has removed hallmark categories A, B, C and E.

Legal Professional Privilege

UK exempts from reporting those intermediaries who are protected by legal professional privilege. In the UK, this includes lawyers, in cases where the information to be reported is covered by legal professional privilege.

In cases where LPP exemptions apply, the reporting obligation shifts to other intermediaries or the relevant tax payer.

Reporting

Reporting will be made either via manual data entry or via XML file upload. Reporting will be done in English.

Penalties

For non-compliance with any part of the regulation a maximum default penalty of up to GBP 5,000 applies, unless an HMRC officer considers this to be inappropriately low. In these cases, a penalty of GBP 600 each day may be applied for an initial period. If failure continues following the initial period, a further fine of GBP 600 for each day may be applied for the period in which the failure continues.

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DAC6 Country Profile: Spain

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Spanish Parliament
In light of the COVID-19 pandemic, Spain delayed DAC6 reporting by six months

We are publishing a series of guides on how each EU member state has implemented DAC6. The guide provides a preview to our full up-to-date country-by-country guide to DAC6.

Our next guide focusses on Spain’s implementation of DAC6.

This blog was originally published in July 2020 and was updated in February 2021.

How has Spain implemented DAC6?

Legislation Details

Spain’s tax authority, Agencia Tributaria (Tax Agency), published DAC6 legislation, called Ley 10/2020, de 29 de diciembre, por la que se modifica la Ley 58/2003, de 17 de diciembre, General Tributaria, en transposición de la Directiva (UE) 2018/822 del Consejo, de 25 de mayo de 2018, que modifica la Directiva 2011/16/UE por lo que se refiere al intercambio automático y obligatorio de información en el ámbito de la fiscalidad en relación con los
mecanismos transfronterizos sujetos a comunicación de información.

DAC6 is implemented by amending General Tax Law 58/2003, of 17
December 2003. The amendments for the final law approval were introduced in Law10/2020 of 29 December 2020.

Taxes covered

Spain’s legislation covers cross-border arrangements. The legislation is in line with the EU Directive (i.e., the legislation applies to all taxes except
VAT, customs duties, excise duties and compulsory social security
contributions), and does not include domestic arrangements or any additional hallmarks.

Legal Professional Privilege

In Spain there are two categories of intermediaries with regard to the application of LPP exemptions. One category is professionals who carry out “participitory advice”; this category is not covered by an LPP exemption. The other category is intermediaries who provide “neutral advice”; this category is covered by an LPP exemption. Within the category of those who are covered, the following categories of professionals have LPP: law firms, tax advisors, auditors, and some other professions.

In cases where the intermediary because of LPP, the obligation will shift to the taxpayer.

Reporting

Spain requires reporting to be made by intermediaries and relevant taxpayers using an electronic/XML file via the online service of the Spanish tax authorities. The information must be submitted in the official language (Spanish). Some sections can be completed in English, but a Spanish translation will need to be provided.

Penalties

The penalties regime applied under the bill mentions for failure to comply with the reporting requirements a penalty of EUR 2,000 per data/ per omitted / inaccurate data on reportable arrangements, with a minimum penalty of EUR 4,000 and a maximum equivalent of the fees or tax value resulting from the reportable arrangement, or the value of the cross-border arrangement if the offender is the relevant taxpayer. The minimum and maximum amounts will be halved when the information is filed after the deadline without prior notice from tax authorities.

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VinciWorks releases new tax evasion course

VinciWorks’ new tax evasion course takes a modern, fresh approach to tax evasion training with a focus on industry-specific guidance, role-relevant scenarios and an interactive, engaging approach to ensuring all staff have the skills and understanding they need to prevent facilitation of tax evasion.

Tax evasion training game

The Criminal Finances Act created a corporate criminal offence for failing to prevent the facilitation of tax evasion. This places the responsibility on businesses to have “reasonable procedures” in place to ensure none of their employees or contractors are involved in helping someone evade their taxes anywhere in the world. Guidance from HMRC advises that reasonable procedures should be guided by the following 6 principles:

  • Risk assessment
  • Proportionality of risk-based prevention procedures
  • Top-level commitment
  • Due diligence
  • Communication and training
  • Monitoring and review
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DAC6 Country Profile: Latvia

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Latvian Parliament
In light of the COVID-19 pandemic, Latvia has chosen to delay DAC6 reporting by six months

We are publishing a series of guides on how each EU member state is implementing DAC6. The guide provides a preview to our full up-to-date country-by-country guide to DAC6.

Our next guide focusses on the Latvia’s implementation of DAC6.

VinciWorks is publishing a series of guides on how each EU member state has implemented DAC6. This blog was originally published in July 2020 and was updated in February 2021.

How has Latvia implemented DAC6?

Legislation Details

Latvia’s tax authority, Valsts ienemumu dienests (State revenue service of the Republic of Latvia), published DAC6 legislation, called Noteikumi par automātisko informācijas apmaiņu par ziņojamām pārrobežu shēmām (Regulations of the Cabinet of Ministers No. 210, Rules on the automatic exchange of information on notifiable cross-border schemes, April 14, 2020), and Grozījumi likumā “Par nodokļiem un nodevām” (Amendments to the Law on Taxes and Duties, 05.03.2020), on 14 April 2020.

Taxes covered

Latvia’s legislation covers cross-border arrangements. The legislation is in line with the EU Directive and does not include domestic arrangements or any additional hallmarks.

The scope of taxes covered by the Latvian law includes all taxes, except VAT, custom duties, excise duties and compulsory social security contributions.

Legal Professional Privilege

The Latvian legislation transposing DAC6 exempts from the reporting obligation due to an LPP right only the Latvian Sworn Attorneys at Law. The initial draft did not include an LPP exemption.

Reporting

It is expected that Latvia will require reporting to be made by intermediaries and relevant taxpayers using an electronic/XML file via the web portal of the Latvian tax authorities.

The information should be provided in the official language (i.e. Latvian). Other languages may be used but the State Revenue Service is then entitled to request translation.

Penalties

The Latvian Tax Administration has the right to impose a fine of up to EUR 3,200 if the relevant taxpayer or intermediary has not complied with the reporting of cross-border arrangements requirements within the legal deadline or in circumstances where the intermediary or relevant taxpayer has failed to comply with the prescribed preparation and filing procedure.

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Cyprus extends DAC6 reporting deadline

The Ministry of Finance at the Cypriot Tax Department have announced they will be extending the deadline for reporting DAC6 arrangements to 31 March 2021. The Tax Department has also announced that the DAC6 Directive is expected to be incorporated into the Cypriot legislation by the end of February 2021.

In light of this, as well as the fact that some of the deadlines for the submission of information set out in this Directive have now expired, the deadline for the submission of DAC6 information has been extended until 31 March 2021.

The deadline has been extended for all the following cases:

  1. Reportable cross-border arrangements that have been made between 25 June 2018 and 30 June 2020
  2. Reportable cross-border arrangements that had been made between 1 July 2020 and 31 December 2020 
  3. Reportable cross-border arrangements made between 1 January 2021 and 28 February 2021.

DAC6: Final Cypriot legislation expected in February 2021

Cypriot DAC6 Legislation

Amendments to the existing Cypriot Law on Administrative Cooperation in the field of Taxation (Law 205(I)/2012) are expected to be finalised in February 2021. Following some final changes, it will be voted at the next plenary session of the Cypriot Parliament. Guidance is expected to follow shortly after the enactment.

Reporting Status

The DAC6 reporting portal – “Ariadne” DAC6 reporting portal is open. However, since the DAC6 Directive has not been transposed into Cypriot Law, filing reports is on a voluntary basis until legislation is enacted. The reporting mechanism is via XML and the Cyprus Tax Department has created a dedicated guidance page containing the XML schema and a User Guide.

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