Regulations to give HMRC clarity on cross-border tax arrangements

• The International Tax Enforcement (Disclosable Arrangements) Regulations 2020 come into force on 1 July 2020
• The Regulations implement the amended EU administrative cooperation directive (DAC6), into UK law
• The Regulations impose a reporting requirement on cross-border arrangements which meet certain ‘hallmarks’ which are considered to indicate potentially aggressive tax planning
• Reports for arrangements entered into on or after 25 June 2018 are due by 31 August 2020
• These Regulations will provide HMRC with more transparency over ways in which cross border tax arrangements are used
• The Regulations define “UK intermediaries” and “UK relevant taxpayers” who are those required to report any cross-border tax arrangements
• The Regulations also state what information is reportable, such as (but not limited to) the identification of the intermediaries and relevant taxpayers, summary of the cross-border arrangement and the value of the arrangement
• A person who fails to comply with the provisions of the Regulations may receive a penalty not exceeding £5,000 or HMRC may increase this up to £600 for each day on which the failure continues
• We are awaiting HMRC guidance prior to 1 July 2020
• This is further effort from HMRC to identify and challenge offshore arrangements and to deter aggressive tax avoidance

See the Regulations here.