- The OECD report released on July 19, 2013 called for the development of mandatory disclosure rules for aggressive or abusive transactions, arrangements or structures and the exchange of this information. In March 2015 a discussion draft was released.
- In the final report published in October 2015, the OECD provides a modular framework that enables countries without mandatory disclosure rules to design a regime that fits their need to obtain early information on potentially aggressive or abusive tax planning schemes and their users.
- The report recommends the adoption of rules on the mandatory disclosure of aggressive tax planning arrangements by tax advisors (also called promoters in the report) and taxpayers.
- Such rules should include specific and generic hallmarks, such as a confidentiality clause and contingent fees, to determine whether a scheme is deemed aggressive and therefore reportable. Specific hallmarks target particular areas of concern such as losses. Furthermore they should establish a mechanism to track disclosures and to link the timeframe for disclosure to whomever is obligated to disclose.
- Concerning the disclosure of international schemes the OECD recognizes that international schemes are more often specifically designed for a particular taxpayer and may involve multiple parties and tax benefits in different countries.
- The report recommends therefore to develop hallmarks that focus on the type of cross-border BEPS outcome that causes concern. The report calls for disclosure of arrangements that include a transaction with a domestic taxpayer that has material tax consequences in the reporting country, when the taxpayer was aware of should have been aware of the cross-border outcome. The taxpayer should, according to the OECD, make reasonable enquiries as to whether the transaction forms part of an arrangement that includes a cross-border outcome that is identified as reportable.
- Sanctions, especially pecuniary penalties, for non-compliance are also recommended.
Impact of BEPS Action 12 for the Netherlands
BEPS Action 12 does not represent a minimum standard and countries are free to choose whether or not to introduce a mandatory disclosure regime. The report mentions that both mandatory disclosure and co-operative compliance are intended to improve transparency, risk assessment and ultimately taxpayer compliance. Currently, taxpayers or their tax advisors are not obliged to report aggressive tax planning arrangements in the Netherlands. Although the Netherlands has a rather successful co-operative compliance practice, we could still expect such rules to be adopted in the future as they can be easily incorporated into the General Taxes Act.