The Organisation for Economic Cooperation and Development (OECD) is looking for feedback on its mandatory disclosure rules public disclosure draft.
It follows an HM Revenue & Customs consultation, which reported its findings earlier this month.
Both organisations are looking for more information on offshore structures and any features or ‘hallmarks’ that could be deemed to be non-transparent and therefore circumvent the Common Reporting Standards (CRS).
Respondents to the UK consultation said they feared the ‘hallmark’ rules would sweep legitimate structures into HMRC’s net and create a reporting burden across the legitimate industry.
The OECD document differs from the HMRC paper – which explicitly concedes there would be circumstances – where, for example, a scheme is created by lawyers covered by legal privilege – when the onus to report the scheme falls to the beneficiary.
Section 2.5 of the OECD documents outlines that there is no obligation to disclose when information is covered by professional secrecy.
The intermediary – for example a lawyer – is bound only to tell a tax authority that a CRS avoidance scheme exists and that it is not required to be disclosed. They are also only required to give written notice to the reportable taxpayer of his or her disclosure obligations.
