Mandatory Disclosure Agreement

EU consultants or intermediaries for people and companies based in the Middle East that conduct transactions within or within the EU may be required to provide information to EU tax authorities. Under a recent EU directive (“EU”), the EU`s mandatory information system (MDR) requires mandatory notification of potentially aggressive tax planning schemes in which EU Member States participate (also known as DAC6). The EU MDR came into force on 25 June 2018, but the deadline for the publication of the information is fast approaching until 31 August 2020. This scheme is broad and can cover several ordinary business transactions (for example. B equipment rental contracts, etc.). The EU has introduced a directive on advertising obligations, which aims to increase transparency in order to detect potentially aggressive cross-border tax plans. We can work with you to identify and manage cross-border reporting obligations using our global network and current tools. Although the directive does not come into force until 1 July 2020, taxpayers and intermediaries will have to monitor their cross-border agreements from 25 June 2018. If transactions in the Middle East are covered by the rules, you should determine who is subject to the reporting requirement and whether it is an external consultant who ensures that the information is accurate before being provided.

The Council`s Directive (EU) 2018/822 amending the 2011/16/EU Directive on the compulsory automatic exchange of tax information aims to require that cross-border agreements be disclosed to tax authorities by intermediaries or subjects established in the European Union and requires the automatic exchange of this information between EU Member States. From 1 July 2020, compulsory advertising obligations in the EU will apply to certain types of tax transactions carried out by taxpayers. All tax regimes subject to reporting that come into effect since June 25, 2018 must be reported retroactively by taxpayers or their intermediaries. Taxpayers operating in one of the EU Member States need to understand the impact of these rules, assess their activities and determine what should be reported and to whom. KPMG has developed an approach to assist clients in their processes and controls, as well as a technology solution that helps collect and evaluate potentially reported transactions. An intermediary is any person (individual or business such as banks, asset managers, funds, accountants, lawyers, bankers, etc.) who designs, markets, organizes or makes available the implementation of a cross-border agreement subject to declaration. These intermediaries should provide information on the schemes to the tax authorities in their home Member State. When a bank based in the Middle East or another intermediary has a location/subsidiary/subject in the EU, it is subject to EU rules and the obligation to provide information rests with the EU institution or subsidiary. If there is no EU intermediary that must be subject to the notification requirement, the EU Tax Obligation is mandatory.

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