COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a COUNCIL DIRECTIVE amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangments
Date: 2017-06-21
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: European tax cooperation, administrative cooperation, administrative formalities, cross-border cooperation, exchange of information, fraud, single market, tax avoidance, tax evasion

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   EUROPEAN COMMISSION  Brussels, 21.6.2017  SWD(2017) 237 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a COUNCIL DIRECTIVE amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangments  {COM(2017) 335 final} {SWD(2017) 236 final}  
 
 
Impact assessment on Mandatory Disclosure Rules for Intermediaries 

Executive Summary Sheet 

A. Need for action 

Why? What is the problem being addressed?  

Recent  leaks have highlighted how certain intermediaries appear to have actively helped their clients to make 
use of aggressive tax planning schemes in order to reduce the tax burden and to conceal money offshore.  
The  lack  of  transparency  facilitates  activities  of  certain  intermediaries  involved  in  promoting  and  selling 
aggressive tax planning schemes. As a consequence of this, Member States suffer from the shifting of profits, 
which  would  otherwise  be  generated  and  become  taxable  in  their  territory,  towards  low-tax  jurisdictions  and 
often  experience  an  erosion  of  their  tax  bases.  The  underlying  problem  detected  is  that  certain  tax  planning 
schemes are being designed and promoted by intermediaries and used by taxpayers for the purpose of avoiding 
or evading taxes.  

What is this initiative expected to achieve?  

The initiative, once implemented, is expected to provide national tax administrations with timely information on 
the design and use of potentially aggressive tax planning schemes with a cross-border element. The authorities 
are expected to benefit from this early disclosure, to take measures promptly and deter the implementation of 
arrangements  that  would  qualfy  as  tax  avoidance,  e.g.  amend  tax  legislation  at  the  national  level  or  focus  a 
specific tax audit, early in the process. 

What is the value added of action at the EU level?  

Experience  shows  that  national  provisions  against  aggressive  tax  planning  cannot  be  fully  effective  since  they 
focus on the domestic dimension of potentially illegitimate arrangements. Thus, many of the structures devised 
to  avoid  taxes  have  a  cross-border  dimension  and  involve  shifting  taxable  income  to  low-tax  jurisdictions. 
Indeed, capital and persons are increasingly mobile, especially within an integrated market, such as the EU. The 
EU is in a better position than any Member State individually to ensure the effectiveness and completeness of 
the system for this exchange of information. 

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why? 
Different  policy  options  have  been  assessed  against  the  criteria  of  effectiveness,  efficiency  and  coherence  in 
comparison to the baseline scenario. The preferred option is a requirement for Member States (i) to lay down an 
explicit  obligation  for  the  mandatory  disclosure  of  potentially  aggressive  tax  planning  schemes  with  a  cross-
border  element  to  their  national  tax  authorities;  and  (ii)  to  ensure  that  their  national  tax  authorities 
automatically exchange this information with the tax authorities of the other Member States by using a purpose-
built mechanism. 

Who supports which option? 
The  initiative  has  received  general  support  from  Member  States,  NGOs,  and  private  individuals.  Business 
stakeholder  groups  and  intermediaries  raised  concerns  about  the  lack  of  clarity  of  a  future  initiative  and  the 
possible administrative burden. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise main ones)?                                      

The requirement to report under a mandatory disclosure regime could be expected to discourage intermediaries 
from  engaging  in  aggressive  tax  schemes.  Similarly,  taxpayers  will  be  less  inclined  to  create  or  use  such 
schemes  if  they  know  that  these  schemes  would  have  to  be  reported  under  a  mandatory  disclosure  regime. 
Currently  tax  authorities  have  limited  knowledge  of  non-domestic  tax  planning  arrangements  and  such  data 
could provide them with timely information to be able to quickly respond with operational measures, legislative 
and/or regulatory changes. In addition, this information could be used for risk assessment and audit purposes.  

What are the costs of the preferred option (if any, otherwise main ones)?                                      

It  is  envisaged  that  the  exchange  of  information  between  Member  States  could  be  accommodated  relatively 
easily  with  existing  reporting  and  exchange  of  information  schemes,  like  advanced  tax  rulings,  which  already 
exist  under  DAC.  The  costs  for  intermediaries  should  be  limited  because  the  information  to  be  reported  to 

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national authorities under the regime should already be available in the summary information sheets that they 
give to taxpayers for explaining the scheme.  

How will businesses, SMEs and micro-enterprises be affected? 

The  initiative  will  affect  all  companies  and  create  a  level  playing  field  within  the  EU.  There  should  be  less  of 
direct  impact  on  SMEs  since  they  are  less  involved  in  aggressive  cross-border  tax  planning  arrangements. 
Instead, larger companies that operate cross-border are much more likely to be affected by the envisaged rules.  

Will there be significant impacts on national budgets and administrations? 
Overall in the medium term, the initiative should raise/collect tax revenue through the introduction of measures 
by  Member  States  to  combat  tax  avoidance  and  tax  evasion  by  their  residents  and  by  deterring  the  use  of 
aggressive tax planning schemes. 

Will there be other significant impacts? 
Since  the  measure  is  also  addressed  by  international  recommendations  that  have  been  endorsed  by  the  G20, 
the implementation of this initiative ensures EU compliance. 

D. Follow up 

When will the policy be reviewed?  
According to Article 27 of DAC the Commission shall submit a report on the functioning of the Directive every 
five  years.  The  first  report  is  expected  by  1  January  2018.  The  currently  proposed  amendment  to  DAC  for 
mandatory  disclosure  rules  for  intermediaries  will  be  evaluated  in  the  review  which  will  be  completed  by  1 
January 2023.  

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