Text proposed by the Commission

Amendment

(2)  Member States find it increasingly difficult to protect their national tax bases from erosion as tax planning structures have evolved to be particularly sophisticated and often take advantage of the increased mobility of both capital and persons within the internal market. These structures commonly consist of arrangements which are developed across various jurisdictions and move taxable profits towards more beneficial tax regimes or have the effect of reducing the taxpayer´s overall tax bill. As a result, Member States often experience considerable reductions in their tax revenues which hinder them from applying growth-friendly tax policies. It is therefore critical that Member States' tax authorities obtain comprehensive and relevant information about potentially aggressive tax arrangements. This information would enable those authorities to be able to promptly react against harmful tax practices and to close loopholes through enacting legislation or by undertaking adequate risk assessments and carrying out tax audits.

(2)  Member States find it increasingly difficult to protect their national tax bases from erosion as aggressive and complex tax planning structures have evolved to be particularly sophisticated and often take advantage of the increased mobility of both capital and persons within the internal market. Those structures commonly consist of arrangements which are developed across various jurisdictions and move the taxable profits of corporations and individuals towards more beneficial tax regimes or have the effect of reducing the fiscal impact on taxpayers. As a result, Member States often experience considerable reductions in their tax revenues. In addition, the spread of the corporate tax rates within Member States and between Member States is rising, and it is key not to compromise the principle of tax equality. This is hindering Member States from applying growth-friendly tax policies. It is therefore critical that Member States' tax authorities obtain comprehensive and relevant information about arrangements facilitating tax evasion and tax avoidance. This information would enable those authorities to be able to promptly react against harmful tax practices and to close loopholes through enacting legislation or by undertaking adequate risk assessments and carrying out tax audits. A lack of reaction from tax authorities on reported schemes should not however be interpreted as implicit clearance by them. Reporting formats should be succinct and user friendly in order to avoid that the volume of information that could be generated by this Directive will by its very size, inhibit meaningful action on schemes that are being reported.

Text proposed by the Commission

Amendment

(3)  Considering that most of the potentially aggressive tax planning arrangements span across more than one jurisdiction, the disclosure of information about those arrangements would bring additional positive results where that information was also exchanged amongst Member States. In particular, the automatic exchange of information between tax administrations is crucial in order to provide these authorities with the necessary information to enable them to take action where they observe aggressive tax practices.

(3)  Considering that most of the potentially aggressive tax planning arrangements span across more than one jurisdiction, the disclosure of information about those arrangements would bring additional positive results where that information was also exchanged amongst Member States. In particular, the automatic exchange of information between tax administrations, and ensuring coordination with financial intelligence units dealing with money-laundering and terrorist financing, are crucial in order to provide these authorities with the necessary information to enable them to take action where they observe aggressive tax practices. However, Member States should be encouraged to establish similar disclosure requirements for arrangements that exist solely in their own jurisdiction.

Text proposed by the Commission

Amendment

(4)  Recognising how a transparent framework for developing business activity could contribute to clamping down on tax avoidance and evasion in the internal market, the Commission has been called on to embark on initiatives on the mandatory disclosure of potentially aggressive tax planning arrangements along the lines of Action 12 of the OECD Base Erosion and Profit Shifting (BEPS). In this context, the European Parliament has called for tougher measures against intermediaries who assist in arrangements that may lead to tax avoidance and evasion.

(4)  Recognising how a transparent framework for developing business activity could contribute to clamping down on tax avoidance and evasion in the internal market, the Commission has been called on to embark on initiatives on the mandatory disclosure of potentially aggressive tax planning arrangements along the lines of Action 12 of the OECD Base Erosion and Profit Shifting (BEPS). In this context, the European Parliament has demonstrated the crucial role of intermediaries in advising, creating and managing tax schemes and called for tougher measures against intermediaries who assist in arrangements that may lead to tax avoidance and evasion.

Text proposed by the Commission

Amendment

(5)  It is necessary to recall how certain financial intermediaries and other providers of tax advice seem to have actively assisted their clients to conceal money offshore. Furthermore, although the CRS introduced by Council Directive (EU) 2014/10727 is a significant step forward in establishing a tax transparent framework within the Union, at least in terms of financial account information, it can still be improved.

(5)  It is necessary to recall how certain financial intermediaries and other providers of tax advice, and auditors, have actively assisted their clients to conceal money offshore. Furthermore, although the CRS introduced by Council Directive (EU) 2014/10727 is a significant step forward in establishing a tax transparent framework within the Union, at least in terms of financial account information, it can still be improved. In addition, the capacity of Member States to process the amount of financial account information received should be enhanced accordingly and tax administrations' financial, human and IT resources should be increased, where necessary, and kept at adequate levels.

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27 Council Directive (EU) 2014/107 of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L 359, 16.2.2014, p. 1).

27 Council Directive (EU) 2014/107 of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L 359, 16.2.2014, p. 1).

Text proposed by the Commission

Amendment

(6)  The disclosure of potentially aggressive tax planning arrangements of a cross-border dimension can contribute effectively to the efforts for creating an environment of fair taxation in the internal market. In this light, an obligation on intermediaries to inform tax authorities on certain cross-border arrangements that could potentially be used for tax avoidance purposes would constitute a step in the right direction. In order to develop a more comprehensive policy, it would also be significant that as a second step, following disclosure, the tax authorities share information with their peers in other Member States. Such arrangements should also enhance the effectiveness of the CRS. In addition, it would be crucial to grant the Commission access to a sufficient amount of information so that it can monitor the proper functioning of this Directive. Such access to information by the Commission does not discharge a Member State from its obligations to notify any state aid to the Commission.

(6)  The disclosure of potentially aggressive tax planning arrangements of a cross-border dimension can contribute effectively to the efforts for creating an environment of fair taxation in the internal market. In this light, an obligation on intermediaries, auditors and, where appropriate, taxpayers to inform tax authorities on certain cross-border arrangements that could potentially be used for tax avoidance purposes would constitute a necessary step in the right direction. In order to develop a more comprehensive policy, it would also be significant that as a second step, following disclosure, the tax authorities automatically share information with their peers in other Member States. Such arrangements should also enhance the effectiveness of the CRS. In addition, it would be crucial to grant the Commission access to relevant information so that it can monitor the proper functioning of this Directive and carry out its responsibilities under competition policies. Such access to information by the Commission does not discharge a Member State from its obligations to notify any state aid to the Commission. Finally, in order to enhance legal certainty for intermediaries and taxpayers, the Commission should publish a list of the reported cross-border arrangements that could potentially be used for tax avoidance purposes, without making any reference to the intermediary or taxpayer.

Text proposed by the Commission

Amendment

(6a)  Recent tax-related leaks have also underlined the need for a better exchange of information on aggressive tax planning arrangements. To highlight one example, it is scandalous that despite of various inquiries on Apple’s tax practices, its recent Jersey-based tax avoidance structure was only revealed with the Paradise Papers leak.

Text proposed by the Commission

Amendment

(7)  It is acknowledged that the disclosure of potentially aggressive cross-border tax planning arrangements would stand a better chance of achieving its envisaged deterrent effect where the relevant information reached the tax authorities at an early stage, in other words before the disclosed arrangements are actually implemented. Where the disclosure obligation is shifted to taxpayers, it would be practical to place the obligation to disclose those potentially aggressive cross-border tax planning arrangements at a slightly later stage, as taxpayers may not be aware of the nature of the arrangements at the time of the inception. To facilitate Member States' administrations, the subsequent automatic exchange of information on these arrangements could take place every quarter.

(7)  It is acknowledged that the disclosure of potentially aggressive cross-border tax planning arrangements would stand a better chance of achieving its envisaged deterrent effect where the relevant information reached the tax authorities at an early stage, in other words before the disclosed arrangements are actually implemented. In addition, appropriate penalties should be imposed to prevent and suppress those arrangements. Where the disclosure obligation is shifted to taxpayers, it would be practical to place the obligation to disclose those potentially aggressive cross-border tax planning arrangements at a slightly later stage. To facilitate Member States' administrations, the subsequent automatic exchange of information on these arrangements could take place every quarter.

Text proposed by the Commission

Amendment

(9a)  The constantly growing role and importance of intellectual property rights in the business models and tax structures of large corporations further underline the urgency of a better exchange of information on tax avoidance arrangements, given the various easy options that the use of intellectual property rights give for the artificial transfer of profits.

Text proposed by the Commission

Amendment

(9b)  The lack of comprehensive, public country-by-country reporting on relevant financial figures of major multinational enterprises has contributed to the poor reliability of aggregated data on offshore structures, highlighted by the fact that many of the recent high-profile tax avoidance structures are not visible in the current commercial corporate financial account databases. Those statistical gaps hinder the attempts of tax authorities to conduct risk assessments on risk jurisdictions and underline the need for a greater exchange of information on tax planning structures.

Text proposed by the Commission

Amendment

(10)  Given that the primary objective of such legislation should focus on ensuring the proper functioning of the internal market, it would be critical not to regulate at the level of the Union beyond what is necessary to achieve the envisaged aims. This is why it would be necessary to limit any common rules on disclosure to cross-border situations, namely situations in either more than one Member State or a Member State and a third country. In such circumstances, due to the potential impact on the functioning of the internal market, one can justify the need for enacting a common set of rules, rather than leaving the matter to be dealt with at the national level.

(10)  Given that the primary objective of such legislation should focus on ensuring the proper functioning of the internal market and limiting tax evasion and tax avoidance, it would be critical not to regulate at the level of the Union beyond what is necessary to achieve the envisaged aims. This is why it would be necessary to limit any common rules on disclosure to cross-border situations, namely situations in either more than one Member State or a Member State and a third country. In such circumstances, due to the potential impact on the functioning of the internal market, one justifies the need for enacting a common set of rules, rather than leaving the matter to be dealt with at the national level. If a Member State implements further national reporting measures of a similar nature, the additional information collected should be shared with other Member States if relevant.

Text proposed by the Commission

Amendment

(11)  Considering that the disclosed arrangements should have a cross-border dimension, it would be important to share the relevant information with the tax authorities in other Member States in order to ensure the maximum effectiveness of this Directive in deterring aggressive tax planning practices. The mechanism for the exchange of information in the context of advance cross-border rulings and advance pricing arrangements should also be used to accommodate the mandatory and automatic exchange of disclosed information on potentially aggressive cross-border tax planning arrangements amongst tax authorities in the Union.

(11)  Considering that the disclosed arrangements should have a cross-border dimension, it would be important to share the relevant information with the tax authorities in other Member States in order to ensure the maximum effectiveness of this Directive in deterring aggressive tax planning practices. The mechanism for the exchange of information in the context of advance cross-border rulings and advance pricing arrangements, should be available to the public and should also be used to accommodate the mandatory and automatic exchange of disclosed information on potentially aggressive cross-border tax planning arrangements amongst tax authorities in the Union.

Text proposed by the Commission

Amendment

(11a)  Since all Member States might not have an incentive to design and implement effective penalties and in order to ensure the consistent implementation of this Directive across Member States, the exchange of information between tax authorities regarding the imposition of penalties and situations where the Member State has refrained from imposing penalties should also be automatic.

Text proposed by the Commission

Amendment

(13)  In order to improve the prospects for effectiveness of this Directive, Member States should lay down penalties against the violation of national rules that implement this Directive and ensure that these penalties actually apply in practice, that they are proportionate and have a dissuasive effect.

(13)  In order to improve the prospects for effectiveness of this Directive, Member States should lay down penalties against the violation of national rules that implement this Directive and ensure that these penalties, including financial penalties, actually apply promptly in practice, that they are effective, proportionate and dissuasive. Member States should submit to the Commission and make publicly available a list of intermediaries and taxpayers on whom penalties have been imposed under this Directive, including names, nationalities and residences.

Text proposed by the Commission

Amendment

(14)  In order to supplement or amend certain non-essential elements of this Directive, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in connection with updating the hallmarks in order to include in the list of hallmarks potentially aggressive tax planning arrangements or series of arrangements in response to updated information on those arrangements or series of arrangements which is derived from the mandatory disclosure of such arrangements.

(14)  In order to supplement or amend certain non-essential elements of this Directive, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in connection with updating the hallmarks. Every two years, the Commission should publish a draft update of the list of hallmarks that define aggressive tax planning to include any new or modified tax evasion and tax avoidance arrangements that will have been identified since the previous update was published and should be brought into force within four months of the publication of the draft update.

Text proposed by the Commission

Amendment

(15a)  In order to ensure the uniform use and interpretation of hallmarks, the Commission should regularly monitor the activities of tax authorities, in accordance with this Directive.

Text proposed by the Commission

Amendment

(18)  Since the objective of this Directive, namely to improve the functioning of the internal market through discouraging the use of cross-border aggressive tax planning arrangements, cannot sufficiently be achieved by the Member States acting individually in an uncoordinated fashion but can rather be better achieved at Union level by reason of the fact that it targets schemes which are developed to potentially take advantage of market inefficiencies that originate in the interaction amongst disparate national tax rules, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on the European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective, especially considering that it is limited to arrangements of a cross-border dimension of either more than one Member State or a Member State and a third country.

(18)  Since the objectives of this Directive, namely to significantly limit the catastrophic consequences of tax evasion and tax avoidance on the public accounts and to improve the functioning of the internal market through discouraging the use of cross-border aggressive tax planning arrangements, cannot sufficiently be achieved by the Member States acting individually in an uncoordinated fashion but can rather be better achieved at Union level by reason of the fact that it targets schemes which are developed to potentially take advantage of market inefficiencies that originate in the interaction amongst disparate national tax rules, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective, especially considering that it is limited to arrangements of a cross-border dimension of either more than one Member State or a Member State and a third country.