Regulatory Blog

On 26 September 2024, the Court of Justice of the European Union issued its judgement in case C-432/23 in which it reinforced the principle of client-attorney privilege in the context of the exchange of information with the tax administration, limiting the extent to which lawyers can be compelled to disclose confidential client information under the Administrative Cooperation Directive (Directive 2011/16), commonly referred to as DAC.

On 17 October 2023 the European Council made significant adjustments to its list of non-cooperative jurisdictions for tax purposes.

On 16 May 2023, the Council of the European Union issued a press release announcing that it has reached a general approach on the amendments to the directive on administrative cooperation in taxation, focussing on the reporting and automatic exchange of information related to crypto-asset transactions and advance tax rulings for high-net-worth individuals.

The recent inclusion of the British Virgin Islands on the EU’s blacklist has caused many to question the legal and regulatory implications. The primary principle to note is that, outside of the EU, EU law has minimal direct application and therefore this temporary inclusion will not bring about any immediate negative consequences for BVI funds or BVI managers.

In a recent blog, our Cyprus office sketched out the fairly extensive implications in Cyprus of the BVI having been added to the EU’s blacklist of non-cooperative jurisdictions as of 14 February 2023. In Luxembourg, the consequences of being blacklisted are more limited.

On 8 December 2022, the European Commission published its proposal for an eighth amendment to the directive on administrative cooperation, which deals with various measures to prevent tax fraud, tax evasion, and tax avoidance in the EU, and to strengthen administrative cooperation and exchange of information on tax matters.

Hard on the heels of the judgment of the European Court of Justice (ECJ) limiting public access to beneficial owner registers (see our recent blog here), the ECJ has now imposed a limitation on a particular aspect of the measures known as DAC6 requiring intermediaries to report arrangements that bear the hallmarks of aggressive tax planning.

The submission of the Country-by-Country reporting/notification obligations in Cyprus is due by 31 December 2022.

On 31 January 2022, the Cyprus Tax Department (CTD) finally brought the regime providing for the mandatory reporting of reportable cross border arrangements (RCBAs), known as DAC6, into force in Cyprus. Up until this point, various transitional provisions and safe-harbours had been in place to soften the introduction of the regime.