European Union’s transparency rules for tax intermediaries : an analysis

Abstract

Purpose: In May 2018, ECOFIN published Council Directive (EU) 2018/822 amending Directive 2011/16/EU on administrative cooperation in the field of taxation, thereby introducing the EU’s Transparency Rules for Tax Intermediaries (KPMG, 2018). This research aims to provide an analysis of the EU’s Transparency Rules by examining the perception of Maltese tax intermediaries on abusive tax practices and these rules, by analysing any potential burdens and impacts of these rules on tax intermediaries, to inquire into any issues of these rules, as well as, to analyse any potential effects of these rules on the EU and Maltese economies. Design: With the ambit of answering the objectives of this research, a number of semistructured interviews were carried out with tax intermediaries, tax professionals’ associations and with officials from the Office of the Commissioner of Revenue. Findings: The findings reveal that Maltese tax intermediaries have a negative perception on the EU’s Transparency Rules. In fact, subsequent findings reveal that these rules create burdens and impacts on tax intermediaries and their profession, include countless issues and also have the potential to impact the EU and Maltese economies. Conclusions: It can be easily concluded that the EU’s Transparency Rules will build an additional layer of complexity in the area of tax planning. Moreover, these rules are broadly drafted to the extent that they create uncertainty and raise the question on whether this council directive will reach its desired outcome. Implications: The value of this research lies in the fact that it provides findings on potential implications of the EU’s Transparency Rules prior to their implementation, so that corrective action may be executed. Further, this research suggests a number of recommendations in an attempt to address the way forward on the problem of abusive tax practices and the EU’s Transparency Rules.