Reporting obligation for cross-border tax arrangements permissible

The European Court of Justice has ruled that the EU requirements for reporting cross-border tax arrangements are permissible.

Based on an EU directive amended in 2018, Germany has also introduced an obligation to report cross-border tax arrangements, which obliges all parties involved in a potentially aggressive tax arrangement to report it to the competent tax authorities. Following a complaint by the Belgian Association of Tax Lawyers, the European Court of Justice has now confirmed the admissibility of various provisions of the EU directive to combat aggressive tax planning. The tax lawyers had criticized, among other things, that the reporting obligation would violate the lawyer's duty of confidentiality.