The liability of tax advisers in the EU has reached its next stage

The FISC Subcommittee of the European Parliament held a public hearing on 25 April 2022 on strengthening the regulation of intermediaries (tax advisors) for a more stable and less vulnerable tax system. The work is aimed to adopt a new European directive to regulate the role of tax advisors in creating a fair and client-friendly tax system.

This hearing follows the first hearing on the Pandora Papers, held in November 2021, which focused on tax evasion and tax avoidance. At the April hearing, the focus moved to the role of tax advisors, tax lawyers and other similar intermediaries in tax avoidance and evasion. Tax advisors positively contribute to the tax systems by facilitating tax compliance and, as a result, tax collection. However, some tax advisors appear to be involved in the design, promotion and implementation of abusive tax schemes. The EU considers it necessary to ensure that the tax advisory sector is adequately equipped to further contribute to the well-functioning and amelioration of tax systems while having all the necessary legislative instruments to deter them from playing any part in tax abusive activities.

The European Commission has announced a series of public consultations for the period 11 May - 20 July 2022 to specify the details of the draft directive. The EU-level regulation will cover the powers of tax advisors in combating tax avoidance, qualification levels, membership in a professional organisation with sanctioning competencies, continuous mandatory professional training and uniformly developed guarantees for an independent exercise of the profession.

ETAF (European Tax Adviser Federation, of which Hungary is a member) believes that the EU Commission will focus exclusively on the role of tax advisers in identifying and preventing tax evasion and will not go beyond what is necessary for that purpose, namely will not overburden the tax profession.

ETAF is convinced that the Directive would also lead to a uniform standard of tax advisory services in the long term, which has an equally significant role in the fight against tax avoidance.

We will inform our clients about the draft directive in one of our future newsletters.

26 May, 2022

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This newsletter provides general information and does not constitute tax advice.