The International Tax Enforcement (Disclosable Arrangements) Regulations 2020

Explanatory Note

(This note is not part of the Regulations)

These Regulations make provisions implementing Council Directive 2018/822 which amends Council Directive 2011/16/EU (“the DAC”) on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC and requires persons to report information in relation to certain types of arrangements known as reportable cross-border arrangements (defined in the DAC) to HMRC.

Part 1 contains introductory provisions. Regulation 1 provides for citation and commencement; authority for the limited retrospective effect is provided by section 84(2)(b) of the Finance Act 2019. Regulation 2 is an interpretation provision.

Part 2 sets out the reporting obligations and supplementary provisions. Regulation 3 concerns the reporting obligations of a UK intermediary, regulation 4 concerns the reporting obligations of a UK relevant taxpayer. “UK intermediary”, “intermediary”, “UK relevant taxpayer” and “relevant taxpayer” are defined in regulation 2 by reference to the DAC. Regulation 5 imposes an annual reporting requirement on UK relevant taxpayers. Regulation 6 specifies the information required to be reported in relation to a reportable cross-border arrangement. Regulation 7 disapplies the reporting obligation from intermediaries in relation to privileged information. Regulation 8 provides for an arrangement reference number. Regulation 9 makes provision for use of an electronic return system to make returns under these Regulations. Regulation 10 provides for the evidence to be given as proof of a return or filing of information. Regulation 11 permits an officer of Revenue and Customs to request information to determine whether the obligations under these Regulations have been satisfied. Regulation 12 contains provisions to be applied when applying the DAC in determining whether an arrangement is a reportable cross-border arrangement. Regulation 13 provides that employees are not subject to the reporting obligations.

Part 3 sets out the penalty provisions for breach of any obligation under the Regulations. Regulation 14 sets out the penalties. Regulations 15 and 17 provides for penalties to be determined by HMRC. Regulation 16 provides for penalties to be determined by the First-tier Tribunal. Regulation 18 sets out the time limits in which proceedings can be brought to determine a penalty by the First-tier Tribunal or a penalty determined by HMRC and provides for the treatment of penalties as if tax charged in an assessment and due and payable. Regulation 19 provides for appeals against penalties determined by HMRC. Regulation 20 provides for cases where HMRC may reduce a penalty. Regulation 21 provides that no liability for a penalty arises where a person has a reasonable excuse for failing to complying with an obligation under the Regulations.

A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.